June 12, 2018/Cordros Capital
EQUITIES
- Gains were sustained in the domestic bourse, with the ASI inching up further by 0.83% to 39,167.04 points, as investors continued hunting bargains.
- The Month-to-Date and Year-to-Date gains improved to 2.79% and 2.42%, respectively.
- The Oil & Gas (+4.89%) index posted the largest gain among sectoral indices, owing to significant interests in SEPLAT (+8.14%) and MOBIL (+4.99%) shares. The Insurance (+0.88%), Industrial Goods (+0.49%), and Consumer Goods (+0.38%) indices followed suit, owing to interests in the shares of NEM (+4.80%), DANGCEM (+1.36%), and CADBURY (+4.00%) respectively. On the flip side, the Banking (-0.04%) index inched lower, following profit taking in FCMB (-4.17%) shares.
- Market breadth remained positive, with 27 gainers and 21 losers, led by SEPLAT (+8.14%) and PRESTIGE (-4.69%) shares. Total volume of trades dropped by 43.39% to 341.48 million units, while value of trades increased by 33.57% to NGN5.19 billion, exchanged in 3,769 deals.
- We look for extension of gains, as relatively lower prices continue to attract investors, supported by strengthened macroeconomic fundamentals.
CURRENCY
- The USD/NGN pair was flat at NGN362 in the parallel market, while it weakened by 0.12% to NGN361.30 in the IEW. Total turnover in the IEW surged 183.02% to USD269.44 million, traded within the NN353-NGN362/USD band.
FIXED INCOME & MONEY MARKET
- The overnight lending rate expanded 392 bps to 16.50%, from 12.58% in the previous session, amid persisting strain on market liquidity.
- Proceedings were bullish in the NTB market, as average yield dropped 4 bps to 12.73%. Buy sentiment was concentrated at the mid (-15 bps) segment of the curve, with the yield on the 93DTM (-125 bps) bill moderating significantly. Conversely, yields expanded at the short (+3 bps) and long (+1 bp) ends of the curve, driven by selloffs of the 23DTM (+49 bps) and 275DTM (+47 bps) bills, respectively. At the NTB auction scheduled for tomorrow, the CBN will offer NGN180.86 billion – NGN6.22 billion of the 91-day, NGN50.00 billion of the 182-day, and NGN124.64 billion of the 364-day – worth of bills to the market.
- The bond market also traded on a bullish note, as average yield moderated by 7 bps to 13.31%. Yields contracted across all ends of the curve – short (-8 bps), mid (-11 bps), and long (-4 bps) – driven by demand for the JAN-2022 (-19 bps), JAN-2026 (-13 bps), and JUL-2030 (-10 bps) bonds, respectively.
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