July 9, 2018/Cordros Update
EQUITIES
- The equities market started the week positive, with the ASI inching up marginally by 0.06% to 37,647.93 points, as investors engaged in bargain hunting.
- As a result, the Month-to-Date and Year-to-Date losses moderated to -1.65% and -1.56%, respectively.
- Among the major sector indices, the Banking (+0.07%) and Oil & Gas (+0.02%) indices posted positive returns, following interests in ETI (+2.00%) and FO (+3.04%) stocks respectively. On the flip side, the Industrial Goods (-0.46%), Consumer Goods (-0.18%), and Insurance (-0.17%) indices closed negative, amidst sell pressures in the shares of WAPCO (-2.56%), DANGSUGAR (-3.78%), and REGALINS (-4.17%), respectively.
- Market breadth remained negative, with 25 losers and 19 gainers, led by UNITYBNK (-9.01%) and CAVERTON (+9.95%). Total volume and value of trades dropped by 51.45% and 35.19%, to 155.17 million units and NGN 1.99 billion, respectively, exchanged in 3,422 deals.
- In our view, the market holds potential for gains in the long term, supported by positive macroeconomic outlook. However, in the absence of a positive one-off trigger in the near term, we think the market will remain volatile in the short-to-medium term.
CURRENCY
- The naira traded flat against the dollar at NGN362 in the parallel market, while it appreciated by 0.16% to NGN362 in the I&E FX window. Total turnover in the IEW was lower by 21.63%, at USD179.06 million, traded within the NGN345-NGN363/USD band.
FIXED INCOME AND MONEY MARKET
- The overnight lending rate surged 1,087 bps to 23.79%, from 12.92% in the previous session, on the back of a squeeze in liquidity due to outflows for FX sales.
- Activities in the treasury bills market were bullish, amidst still relatively healthy liquidity, as average yield fell by 18 bps to close at 12.20%. Yields moderated at the short (-28 bps), mid (-18 bps), and long (-3 bps) ends of the curve, on the back of demand for the 66DTM (-98 bps), 136DTM (-63 bps), and 248DTM (-16 bps) bills respectively.
- Bullish sentiments prevailed in the bond market, with average yield trending southwards by 9 bps to 13.82%. Buy sentiment was spread across all ends (short: -16 bps; mid: -4 bps; long: -6 bps) of the curve, with the FEB-2020 (-35bps), FEB-2028 (-16 bps), and MAR-2036 (-21 bps) bonds recording significant contractions, respectively.