May 21, 2018/Cordros Report
EQUITIES
- The bears retained hold of the market, as the benchmark index recorded its third consecutive session of loss (-0.12%) at 40,425.07 points – lowest since January 9th.
- Accordingly, Month-to-Date loss increased to 2.04%, while Year-to-Date gain moderated to 5.71%
- The Insurance (-0.86%) and Banking (-0.21%) indices recorded losses, following sell pressures in the shares of NEM (-4.91%) and FBNH (-2.71%) – its 7th straight session of decline — respectively. On the flip side, the Oil & Gas (+0.52%), Industrial Goods (+0.28%), and Consumer Goods (+0.13%) indices posted positive returns, following investor interest in FO (+4.90%), WAPCO (+0.62%), and UNILEVER (+1.00%) stocks. It is worth stating, that following the lift of the suspension on the trading of its shares, IKEJAHOTEL attracted interest and posted a gain of 4.49%.
- Market breadth turned positive, snapping five sessions of negative breadth, with 26 gainers and 22 losers, led by UNITYBNK (+8.51%) and NEM (-4.91%) shares respectively. Total volume and value of trades remained modest, dipping further by 22.61% and 54.01%, to 271.27 million units and NGN2.30 billion, respectively. Total deals stood at 4,052 deals.
- The continued sideways trading raises a cause for concern, suggesting cautious trading among investors. Notwithstanding, encouraging macroeconomic outlook continues to strengthen our bias for positive equity returns in the medium to long term.
CURRENCY
- The naira leapt from the record low of NGN364/USD recorded in the previous session, to NGN363 in the parallel market, while it weakened by 0.17% to NGN361.47 in the I&E FX window. Total turnover in the IEW dropped by 49.85% to USD101.53 million – lowest since April 25th – traded within the NGN358-NGN363/USD band. 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 surged 842 bps to 17.42%, from 9.00% last Friday, as liquidity remained strained in the absence of any significant inflows.
- Activities in the treasury bills market were bullish, as average yield moderated by 6 bps to close at 13.00%. Yields contracted at the short (-9 bps) and mid (-12 bps) ends of the curve, driven by demand for the 52DTM (-52 bps) and 101DTM (-65 bps) bills, respectively. Conversely, yield at the long (+3 bps) segment expanded, following a selloff of the 227DTM (+55 bps) bill.
- Bearish sentiments persisted in the bond market, with average yield inching upwards by 4 bps to 13.31%. The mid (+7 bps) and long (+11 bps) segments experienced sell pressure, with the JAN-2026 (+8 bps) and JUL-2034 (+23 bps) bonds recording significant expansions, respectively. Conversely, yield at the short (-3 bps) end contracted, driven by demand for the FEB-2020 (-21 bps) bond.
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