May 17, 2018/Cordros Report

EQUITIES

• Proceedings in the equities market turned bearish, as the benchmark index dropped by 0.77% to 40,651.41 points, following sell pressure across major sectors.  

• Accordingly, the Month-to-Date and Year-to-Date returns dipped to -1.43% and 6.36% respectively. 

• All major sectoral indices posted negative returns – Industrial Goods (-1.65%), Consumer Goods (-1.10%), Oil & Gas (-1.05%), Banking (-0.36%), and Insurance (-0.04%) – largely driven by selloffs in the shares of CCNN (-5.26%), NB (-3.45%), JAPAULOIL (-3.03%), STERLNBANK (-4.91%), and AFRINSURE (-4.76%) respectively.  

• Market breadth remained negative, with 27 losers and 18 gainers, led by CCNN (-5.26%) and SOVRENINS (+9.09). Interest in SOVRENINS has been sustained in the last three sessions, amidst positive performance in its Q1-2018 results, wherein gross premium written and PAT grew by 25.7% and 28.2% to NGN5.21 billion and NGN560.25 million respectively. Total volume and value of trades were 63.54% and 73.43% higher at 424.37 million units and NGN7.57 billion respectively, executed in 3,502 deals. 

• Despite today’s loss, we reiterate our positive outlook for risky assets in the medium to long term, as still-positive fundamental remain supportive of gains.

CURRENCY

• The USD/NGN depreciated by 0.12% o NGN361.22 in the I&E FX window, while it remained flat at NGN363 in the parallel market. Total turnover in the IEW dropped by 46.78% to USD114.89 million – the lowest since 25th April – consummated within the NGN314.50-NGN363/USD band.

FIXED INCOME AND MONEY MARKET 

• The overnight lending rate eased 1,096 bps to 13.71%, following inflows from matured OMO and treasury bills worth NGN262.61 billion and NGN67.68 billion respectively. The CBN mopped up NGN40.95 billion via OMO auction, selling NGN58.14 million of the 112DTM and NGN40.89 billion of the 182DTM, at respective stop rates of 11.05% and 12.15%.

• Sentiments were slightly bearish in the NTB secondary market, as average yield rose by 4 bps to 13.10%. Selloffs of the 7DTM (+480 bps) bill led to yield expansion at the short (+36 bps) end of the curve. Conversely, yields at the mid (-11 bps) and long (-12 bps) segments contracted, on the back of demand for the 140DTM (-133 bps) and 259DTM (-55 bps) bills, respectively.

• Bullish sentiments prevailed in the bond market, as yield fell by 2 bps, on average, to 13.16%. Investor interest was high at the short (-18 bps) end of the curve, with the FEB-2020 (-46 bps) bond recording a significant contraction. Conversely, selloffs of the MAR-2024 (+14 bps) and MAR-2036 (+11 bps) bonds led to yield expansions at the mid (+7 bps) and long (+7 bps) segments. 

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