January 14, 2019
By InvestAdvocate
Lagos (INVESTADVOCATE)-The Nigerian equities market on Monday extended gains from last week as the benchmark index appreciated by 0.45 percent to 29,964.79 points, following buying sentiment in the shares of Nigeria’s most capitalised listed company and cement producer, Dangote Cement Plc.
Cordros reports accordingly, the Month-to-Date (MTD) loss moderated to 4.66 percent and Year-to-Date (YTD) returns currently stands at -4.66 percent.
The update says most sectoral indices – Consumer Goods and Banking indices declined -0.07 percent and -0.08 percent apiece, the Oil & Gas and Insurance indices dipped -0.27 percent and -1.53 percent respectively to close negative.
Cordros reports that notable stocks include, top tier brewer, Guinness Nigeria Plc and mid-tier lender, Wema Bank Plc; both depreciated -1.52 percent and -8.33 percent each, oil marketer, Forte Oil Plc and insurer, Linkage Assurance Plc declined -3.45 percent and -9.23 percent respectively.
On the positive side, the Industrial index closed positive by +1.08 percent to close positive on account of the gains in the shares of Dangote Cement Plc which gained by +1.69 percent.
According to the update, market breadth was flat with 11 losers and 11 gainers posted, led by insurer, Linkage Assurance Plc and market leader in aluminum sheets in Nigeria, First Aluminum Nigeria Plc, both appreciated +9.09 percent respectively.
Total volume moderated by 35.8 percent to 132.41 million units, valued at N1.09 billion, and exchanged in 2,542 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,” the Cordros update affirmed.
On the currency beat, the greenback appreciated by 0.18 percent to N364.30 and 0.28 percent to 362.00 at the Investors’ & Exporters’ FX Window (I&E FX) and in the parallel market respectively.
Total turnover in the IEW increased by 24.1 percent to $219.98 million, with trades consummated within the N360.00-366.00/USD band, Cordros reported.
Meanwhile, the apex bank, on Friday, intervened in the FX market — its first intervention in this window this year — injecting $263 million into the interbank retail Secondary Market Intervention Sales (SMIS), and selling CNY39 million in spot and short-tenured forwards.
In terms of fixed income and money market, Cordros says the overnight lending rate surged by 1,058 bps to 35.25 percent, from 24.67 percent in the previous session, following wholesale FX provisioning as well as the CBN’s OMO intervention, wherein N25.14 billion – N4.47 of the 94DTM, N1.13 billion of the 185DTM, and N19.54 billion of the 353DTM – worth of bills were sold at respective stop rates of 11.9 percent, 13.5 percent, and 15.0 percent.
The Cordros update reports that trading in the treasury bills market was bullish, as average yield moderated by 6 basis points (bps) to 15.25 percent. “Yields contracted at the short (-12 bps) and long (-9 bps) ends of the curve, owing to demand for the 66DTM (-81 bps) and 255DTM (-47 bps) bills, respectively. Conversely, yields expanded at the mid (+9 bps) segment, following a selloff of the 94DTM (+92 bps) bill,” the report added.
According to Cordros, activities in the bond market were bearish, as average yield rose by 7 bps to 15.32 percent. Sell pressure was concentrated at the short (+19 bps) and mid (+5 bps) segments, with yield on the JUN-2019 (+39 bps) and JAN-2026 (+10 bps) bonds expanding respectively.
“Conversely, demand for the APR-2037 (-4 bps) bonds led to yield contraction at the long (-4 bps) end of the curve,” the Update affirmed.
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