May 3, 2018/Cordros Capital

EQUITIES

• The equities market posted a loss of 0.48%, offsetting week’s cumulative gain of 0.15%, and causing the ASI to drop to 41,107.81 points. 

• Accordingly, the Month-to-Date and Year-to-Date returns moderated to -0.39% and 7.49% respectively. 

• The Consumer Goods (-1.53%), Oil & Gas (-0.78%), and Industrial Goods (-0.18%) indices recorded losses, owing to selloffs of the shares of INTBREW (-8.30%) — following the brewer’s unimpressive Q1-2018 result, wherein a loss after tax of NGN2.24 billion was posted, against a NGN1.36 billion profit in the previous year — and profit taking in FO (-4.94%) and DANGCEM (-1.09%) stocks, respectively. On the flip side, gains in FBNH (+1.63%) and CONTINSURE (+4.61%) shares buoyed positive returns in the Banking (+0.79%) and Insurance (+0.24%) indices. 

• Market breadth was flat, with 25 gainers and losers apiece, led by UNITYBNK (+9.52%) and INTBREW (-8.30%) respectively. Total volume of trades increased by 15.98% to 320.40 million units, valued at NGN4.76 billion, and exchanged in 4,482 deals. 

• Our outlook for the equities market, in the medium-to-long term, remains positive, amidst strengthening macroeconomic fundamentals.

CURRENCY

• The USD/NGN was flat at NGN362 in the parallel market, while it appreciated by 0.01% to NGN360.46 in the I&E FX window. Growth in total turnover in the I&E FX window turned negative by 48.87% to USD185.36 million, traded within the NGN345-NGN363/USD band. Yesterday, the apex bank injected USD210 million into the FX market, allocating USD100 million to the wholesale window, and USD55 million apiece to the SMEs and invisibles segments.

FIXED INCOME AND MONEY MARKET 

• The overnight lending rate expanded 279 bps to 5.00%, as the CBN mopped up today’s inflows — OMO (NGN186.68 billion) and treasury (NGN190.84 billion) bills — via OMO auction. The apex bank sold a total of NGN600.00 billion — NGN175.49 billion of the 105DTM and NGN424.51 billion of the 245DTM — worth of bills at respective stop rates of 11.00% and 12.10%.

• Sentiments were slightly bearish in the NTB secondary market, following announcement of the OMO auction. Consequently, average yield rose by 1 bp to 11.17%. Selloffs of the 105DTM (+44 bps) and 273DTM (+41 bps) bills led to yield expansion at the mid (+6 bps) and long (+3 bps) ends of the curve. Conversely, yield at the short (-6 bps) segment contracted on the back of demand for the 84DTM (-87 bps) bill.

• Bearish sentiments prevailed in the bond market, as yield rose by 7 bps on average, to 12.74%. There were sell pressures at the short (+6 bps), mid (+10 bps), and long (+6 bps) ends of the curve, with the JUN-2019 (+24 bps), JAN-2026 (+22 bps), and JUL-2030 (+15 bps) bonds recording the largest expansions, respectively. 

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