May 23, 2018/Cordros Report

EQUITIES

• Proceedings in the equities market remained bearish, as the ASI inched lower — for the fifth consecutive session — by 0.25% to 40,150.55 points. 

• Accordingly, the Month-to-Date loss increased to 2.71% while the Year-to-Date gain dropped to 4.99% — the lowest since January 8th. 

• All major sectoral indices closed lower – Consumer Goods (-0.47%), Insurance (-0.30%), Banking (-0.17%), and Industrial Goods (-0.10%) – save for the Oil & Gas index which rose by 0.08%. Notable stocks include UACN (-8.52%), AIICO (-4.62%), ACCESS (-0.46%), CAP (-2.87%), and MRS (+4.87%), respectively. Other notable performances were sighted in some tier 1 banking stocks — FBNH (+0.94%), UBA (+0.89%), and GUARANTY (+0.23%) — wherein gains resurfaced, with particular reference to FBNH, which halted eight consecutive sessions of losses. Also, IKEJAHOTEL remained investors toast, as it continued to record significant gains since the lift of the suspension on its shares on Monday. 

• Market breadth remained negative, with 28 losers and 15 gainers, led by UACN (-8.52%) and IKEJAHOTEL (+9.80%) shares respectively. Total volume of trades decreased by 5.18% to 266.7 million units, valued at NGN4.67 billion (+14.23%), and traded in 3,721 deals. 

• Despite persisting selloffs and continued sessions of sideways trading, still-positive macroeconomic fundamentals remain suggestive of gains in the equities market in the long term.

CURRENCY

• The naira remained subdued by the still-strengthening dollar, as the USD/NGN fell to the lowest in 9 months at NGN366 in the parallel market, while it depreciated by less than 1 bp to NGN361.42 in the I&E FX window. Total turnover in the IEW inched lower by 3.59% to USD249.76 million, with trades still within the NGN359-NGN363.50/USD band.

FIXED INCOME AND MONEY MARKET

• The overnight lending rate expanded by 42 bps, closing at 18.42%, amidst relatively unchanged system liquidity.  

• Proceedings in the NTB market turned bearish, as average yield increased by 6 bps to 12.99%. Selloffs occurred across the mid (+7 bps) and long (+9 bps) ends of the curve, with the 162DTM (+24 bps) and 295DTM (+119 bps) bills recording significant expansions. Yield at short segment was flat.

• Bearish sentiments returned to the bond market, as average yield rose by 10 bps to 13.34%. Yields expanded at the short (+27 bps) and long (+2 bps) ends of the curve, following selloffs of the FEB-2020 (+49 bps) and APR-2037 (+4 bps) bonds, respectively. Conversely, yield at the mid (-3 bps) segment contracted, driven by demand for the MAR-2027 (-8 bps) bond.

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