May 14, 2018/Cordros Update
EQUITIES
- The equities market started the week on a negative note, as the ASI dipped 0.84% to 40,677.61 points, as investors took profit in value stocks.
- Accordingly, the Month-to-Date and Year-to-Date returns dropped to -1.43% and 6.37% respectively.
- The Consumer Goods (-1.55%), Insurance (-1.74%), Banking (-0.44%), and Industrial Goods (-0.25%) indices closed lower, owing to profit taking in NESTLE (-3.16%), CUSTODIAN (-3.65%), ZENITHBANK (-0.52%), and DANGCEM (-0.61%) shares, respectively. Meanwhile, interest in ETERNA (+1.01%) stocks caused positive returns in the Oil & Gas (+0.01%) index.
- Market breadth turned negative, with 32 losers and 11 gainers, led by CILEASING (-9.36%) and CAVERTON (+4.98%) respectively. Total volume of trades dipped 1.95% to 218.77 million units, valued at NGN2.23 billion, and exchanged in 4,109 deals.
- Our outlook for the equities market remains positive, as strengthening macroeconomic fundamentals suggest legroom for gains exist.
CURRENCY
- The USD/NGN was flat at NGN363 in the parallel market, while it depreciated by 0.14% to NGN361.57 (highest since August 2017) in the I&E FX window. Total turnover in the I&E FX window dropped by 30.77% to USD125.71 million, traded within the NGN358-NGN363/USD band.
FIXED INCOME AND MONEY MARKET
- The overnight lending rate spiked 9,075 bps to 164.17% (highest since 12th April 2017), from 73.42% last Friday, as liquidity remained strained in the absence of any significant inflows.
- Activities in the treasury bills market were bearish, weighed by the squeeze in system liquidity. Consequently, average yield expanded (+34 bps), to close at 13.64%. Yields expanded at the short (+31 bps), mid (+47 bps), and long (+25 bps) ends of the curve, driven by selloffs of the 59DTM (+174 bps), 136DTM (+266 bps), and 325DTM (+88 bps) bills, respectively.
- The bond market was also bearish, with average yield inching upwards by 3 bps to 13.21%. The long (+11 bps) segment experienced sell pressure, with the MAR-2036 (+22 bps) bond recording a significant expansion. Conversely, yield at the short (-3 bps) end contracted, driven by demand for the MAR-2036 (+22bps) bond. Yield at the mid segment was flat.