May 30, 2018/Cordros Report
EQUITIES
- Investors remained bearish in the equities market, with the ASI declining by 1.05% to 38,606.41 points. Correspondingly, market capitalisation fell below NGN14 trillion to NGN13.98 trillion.
- Accordingly, Month-to-Date loss surged to 6.45% — the highest seen so far in 2018 – while Year-to-Date gain dropped to 0.95%.
- The Consumer Goods (-2.63%) index posted the largest loss, followed by the Industrial Goods (-2.56%) and Banking (-0.34%) indices, largely attributable to selloffs of the shares of INTBREW (-4.92%), DANGCEM (-1.02%), and STERLNBANK (-4.58%) respectively. Meanwhile, gains resurfaced in the Insurance (+0.99%) and Oil & Gas (+0.06%) indices, following interests in the shares of HMARKINS (+6.25%) and ETERNA (+3.98%).
- Market breadth was negative, with 25 losers and 23 gainers, led by HMARKINS (+6.25%) and IKEJAHOTEL (-7.04%) – which halted 5 consecutive days of gains. Growth in total volume and value of trades turned positive at 53.86% and 188.46% to 342.05 million units and NGN4.74 billion, respectively, exchanged in 5,057 deals.
- Despite continued bearish trading, relatively lower stock prices create room for bargain-hunting over the medium-to-long term. Thus, we guide investors (particularly those with a strong bias for short termism) to trade cautiously and focus primarily on fundamentally sound stocks.
CURRENCY
- The naira depreciated against the dollar by 0.12% to NGN362.02 in the IEW – highest since August 2017— while it strengthened by 0.82% to NGN363 in the parallel market. Total turnover in the IEW fell by 45.11% to USD176.98 million, consummated within the NGN359-NGN363/USD range (previously: NGN347.50-NGN363).
FIXED INCOME & MONEY MARKET
- The overnight lending rate shed 192 bps to 2.50%, amidst still buoyant liquidity. OMO and treasury bills worth NGN206.37 billion and NGN99.21 billion will mature into the system tomorrow.
- Proceedings in the NTB market were mixed, albeit with a bearish bias, as average yield recorded a marginal increase (+ 1 bp) to 12.62%. The short (+5 bps) and long (+4 bps) ends of the curve recorded yield expansions, while yield contracted at the mid (-10 bps) segment. Notable bills include the 22DTM (+85 bps), 288DTM (+47 bps), and 169DTM (-46 bps) respectively. At today’s NTB auction, NGN4.96 billion, NGN24.80 billion, and NGN19.84 billion of the 91-day, 182-day, and 364-day bills were allotted. The auction was 2.08x oversubscribed, with yield remaining unchanged on the 91-day (10.00%), closing lower on the 182-day (10.30%; previously 10.50%), and higher on the 364-day (11.00%; previously 10.70%) bills.
- Bullish sentiments persisted in the bond market, as average yield moderated by 8 bps to 13.19%. Yield contracted at the short (-13 bps) and mid (-14 bps) ends of the curve, following demand for the JUN-2019 (-84 bps) and MAR-2024 (-25 bps) bonds. Conversely, yield at the long (+1 bp) segment expanded following a selloff of the JUL-2034 (+9 bps) bond.