November 21, 2018/Cordros Update

EQUITIES

• Gains from the previous session were wiped off, as the ASI shed 0.78% to 31,969.79 points, following loses across major Industrial Goods and Banking stocks.

• Against that backdrop, the Month-to-Date and Year-to-Date losses increased to 1.53% and 16.40% respectively.

• On sectoral performance, losses across the Industrial (-2.58%) and Banking (-1.55%) indices offset gains in the Oil & Gas (+1.10%), Insurance (+0.26%), and Consumer Goods (+0.18%) indices. Notable stocks include DANGCEM (-1.72%), GUARANTY (-2.98%), MOBIL (10.00%), PRESTIGE (9.84%) and INTBREW (+1.82%), respectively.

• Market breadth was negative with 22 losers and 10 gainers, led by with the loser chart led by UNITYBNK (-8.60%) and MOBIL (+10.00%) respectively. Total volume and value of trades surged by 60.5% and 95.0% to 237.75 million units and NGN3.50 billion, respectively, exchanged in 3,359 deals.

• We reiterate our negative outlook for the equities market in the short to medium term, amidst political concerns ahead of the 2019 elections, and the absence of a positive market trigger. However, positive macroeconomic fundamentals remain supportive of recovery in the long term

CURRENCY

• The naira weekend against the US dollar by 0.16% to NGN364.26 at the I&E window, while it was flat at NGN364 in the parallel market. Total turnover in the IEW grew by 19% to USD129.06 million with trades consummated within the NGN356.00-NGN364.75/USD band.

FIXED INCOME AND MONEY MARKET

• The overnight lending rate moderated by 16 bps, closing at 10.67%, amidst still healthy liquidity. 

• Proceedings in the NTB market were bearish, as average yield rose by 2 bps to 14.02%. There were selloffs across the mid (+2 bps), and long (+7 bps) segments, with yields on the 106DTM (+22 bps) and 253DTM (+55 bps) bills expanding, respectively. Conversely, demand for the 50DTM (-21 bps) bill led to yield contraction at the short (-2 bps) end of the curve.

• Sentiments in the bond market, were mixed as average yield closed flat at 15.40%. Yields contracted at the short (-1 bp) and long (-1 bp) ends of the curve, driven by demand for the JUN-2019 (+-7 bps) and MAR-2036 (-2 bps) bonds, respectively. On the flip side, a selloff of the JAN-2026 (+4 bps) bond, led to yield expansion at the mid (+1 bp) segment. The results of today’s primary auction had not yet been released at the time of writing.

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