May 31, 2018/Cordros Report
EQUITIES
- The equities market remained pressured, as the ASI declined further by 1.30%, to 38,104.54 points — marking the 10th consecutive losing session and causing the Year-to-Date return to close negative at -0.36%.
- Accordingly, the Month-to-Date loss also dipped further to 7.67%.
- Losses persisted across major sectoral indices, with the Consumer Goods (-2.59%) index remaining the top loser, followed by the Industrial Goods (-2.13%), Banking (-1.10%), and Oil & Gas (-0.34%) indices. These were largely attributable to selloffs of the shares of INTBREW (-9.64%), DANGCEM (-1.03%), ACCESS (-4.59%), and FO (-9.09%), respectively. On the flip side, the Insurance (+0.23%) index remained positive, owing to interests in AFRIPRUD (+1.53%) shares.
- Market breadth remained negative, with 26 losers and 21 gainers, led by INTBREW (-9.64%) and CCNN (+10.12%), respectively. Total volume and value of trades surged 372.86% and 1,402.36% to 1.62 billion units and NGN71.20 billion, respectively. That reflects the impact of an off-market trade, wherein 1.14 million units of STANBIC crossed at NGN53.75 in eight deals to Stanbic Africa Holdings Limited (a wholly owned subsidiary of Standard Bank Group Limited) and parent company of Stanbic IBTC Holdings Plc. Following that, Stanbic Africa Holdings Limited’s shareholding in Stanbic IBTC increased to 64.44%, from 53.09%.
- Continued selloffs call for cautious trading among investors in the short term. However, falling prices make room for bargain hunting in value stocks, as still-strengthened macroeconomic fundamentals remain supportive of gains in the medium to long term.
CURRENCY
- In the IEW, the naira strengthened against the USD by 0.29% to NGN360.97, while it closed flat at NGN363 in the parallel market. Total value of trades in the IEW spiked by 222.52% to USD570.81 million – highest since April 6th. Meanwhile, yesterday, the apex bank injected USD210 million into the FX market, allocating USD100 million to the wholesale window, and USD55 million apiece to the SMEs and invisibles segments.
FIXED INCOME AND MONEY MARKET
- The overnight lending rate expanded 117 bps to 3.67%, as the CBN mopped up today’s inflow of OMO (NGN206.37 billion) and treasury (NGN99.21 billion) bills via OMO auction. The apex bank sold a total of NGN561.27 billion — NGN348.70 million of the 112DTM and NGN560.92 billion of the 231DTM — worth of bills at respective stop rates of 11.05% and 12.15%.
- Sentiments were bearish in the NTB secondary market, following the liquidity mop-up, as average yield rose by 6 bps to 12.68%. Selloffs of the 35DTM (+27 bps), 147DTM (+39 bps), and 217DTM (+43 bps) bills led to yield expansion at the short (+3 bps), mid (+5 bps), and long (+10 bps) ends of the curve.
- Proceedings in the bond market were mixed, albeit with a bullish bias, as yield moderated by 2 bps on average, to 13.18%. Demand for the JAN-2022 (-18 bps) and JUL-2034 (-8 bps) bonds led to yield contraction at the short (-5 bps) and long (-4 bps) segments. Conversely, there was sell pressure at the mid (+6 bps) end of the curve, with the MAR-2024 (+13 bps) bond recording the largest expansion.
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