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NSE Opens Week Negative as Sentiments Turns Bearish, Following Sell-Offs in Bellwether Stocks

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L – R: Shows Tinuade Awe, Executive Director, The Nigerian Stock Exchange (NSE) presenting a replica of the closing gong to Mr. Siaka Isaiah Idoko-Akoh Esq, Chairman/CEO of Investment & Securities Tribunal (IST) during a courtesy visit to the Exchange and Closing Gong Ceremony on Monday, May 7th 2018 at the Exchange in Lagos

May 7, 2018/Cordros

EQUITIES

  • Sentiments turned bearish on the domestic bourse, as the ASI dipped 0.11% to 41,172.82 points – depicting a negative start to the week. This followed late selloffs in value stocks. 
  • Accordingly, the Month-to-Date and Year-to-Date returns inched lower to -0.23% and +7.66% respectively. 
  • Losses in the Consumer Goods (-0.73%) and Banking (-0.31%) indices muted gains posted by the Industrial Goods (+0.39%), Oil & Gas (+0.15%), and Insurance (+0.09%) indices. This was largely driven by profit-taking in the shares of NB (-0.78%) and FBNH (-2.85%), as well as demands for DANGCEM (+1.02%), OANDO (+4.79%), and AIICO (+4.35%) shares, respectively. 
  • Market breadth remained positive, with 21 gainers and 18 loses, led by ETERNA (+9.76%) and UNITYBNK (-5.00%) respectively. In addition to ETERNA, it is worth noting today’s strong interest in the shares of CILEASING (+5.00%) and MAYBAKER (+3.38%). Interestingly, YtD, ETERNA and CILEASING have delivered 41% and 39%, respectively. Total volume of trades closed lower by 21.94% to 221.40 million units, valued at NGN257 billion (-39.25%), and exchanged in 5,629 deals. 
  • Despite the loss in today’s session, we reiterate our bullish bias for equities in the medium to long term, as still-positive macroeconomic fundamentals continue to make a case for positive returns.

CURRENCY

  • The USD/NGN depreciated by 0.04% to NGN360.91 in the I&E FX window, while it remained flat at NGN362 in the parallel market. Total turnover in the I&E FX window inched lower by 0.65% to USD232.68 million. Meanwhile, the apex bank injected US349.34 million into the Retail Secondary Market Intervention Sales (SMIS) on Friday.

FIXED INCOME AND MONEY MARKET

  • The overnight lending rate spiked 483 bps to 8.17%, from 3.33% last Friday, following outflows for FX sales ­— USD349.34 million was sold at the Retail Secondary Market Intervention Sales (SMIS) — by the CBN.
  • Activities in the treasury bills market were mixed, albeit with a bearish bias, weighed by the squeeze in system liquidity. Consequently, average yield expanded marginally (+1 bp), to close at 11.30%. Yields expanded at the short (+1 bp) and mid (+12 bps) ends of the curve, driven by selloffs of the 73DTM (+81 bps) and 108DTM (+41 bps) bills, respectively. Conversely, the long (-17bps) segment experienced demand pressure, with the 213DTM (-191 bps) bill recording a significant contraction. 
  • The bond market was bearish, with average yield inching upwards by 4 bp to 12.92%. The short (+15 bps) segment experienced sell pressure, with the FEB-2020 (+63 bps) bond recording a significant expansion. Conversely, yields at the mid (-1 bps) and long (-3 bps) ends contracted, driven by demand for the MAR-2027 (-3 bps) and JUL-2034 (-9 bps) bonds, respectively.

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