January 15, 2019/Cordros Update

EQUITIES

The bulls continue to dominate the Nigerian equities market as the benchmark index appreciated by 0.58% to 30,137.53 points, following interest across value stocks.
 
Against the foregoing, the Month-to-Date loss moderated to 4.11%.
 
All sectoral indices closed positive, with the Insurance (+3.50%) index leading the pack, followed by the Industrial (+3.11%), Consumer Goods (+0.22%), Banking (+0.34%), and Oil & Gas (+0.28%) indices. The notable stocks include MANSARD (+8.33%), CCNN (+10.00%), DANGSUGAR (+3.93%), and STANBIC (+2.93%) respectively.
 
Market breadth was positive with 21 losers and 13 gainers, led by CCNN and AIRSERVICE (-9.49%) stocks respectively. Meanwhile, total volume surged by 126.6% to 300.03 million units, valued at NGN3.25 billion, and exchanged in 3,760 deals.
 
Our views for the equities market remain cautious as political jitters ahead of the 2019 elections intensifies, and the absence of a positive market trigger. However, positive macroeconomic fundamentals remain supportive of recovery in the long term.
 
CURRENCY
 
The USD/NGN appreciated by 0.19% to NGN363.61 at the I&E FX window, but was flat at NGN362.00 in the parallel market. Total turnover in the IEW moderated by 32.4% to USD148.67 million, with trades consummated within the NGN361.00-365.60/USD band.
 
FIXED INCOME AND MONEY MARKET 
 
The overnight lending rate contracted 1,108 bps to 24.17%, following inflows from the JUL-2021 bond coupon payments (NGN40.68 billion).   The CBN conducted an OMO auction, selling NGN22.51 billion – NGN2.80 million of the 100DTM, NGN508.60 million of the 163DTM, and NGN22.00 billion of the 317DTM – worth of bills were sold at respective stop rates of 11.9%, 13.5%, and 15.0%.
 
Proceedings in the treasury bills market were bearish, as average yield rose by 7 bps to 15.32%. Yields expanded at the short (+8 bps) and long (+10 bps) ends of the curve, following selloffs of the 9DTM (+54 bps) and 198DTM (+63 bps) bills, respectively. Demand for the 121DTM (-13 bps) bill led to yield contraction at the mid (-1 bp) segment.
 
Sentiments in the bond market were bullish as average yield moderated by 11 bps to 15.21%. There were buying sentiments across the short (-9 bps), mid (-13 bps) and long (-10 bps) segments, driven by demand for the FEB-2020 (-33 bps), JAN-2026 (-22 bps) and JUL-2034 (-14 bps) bonds, respectively.

Kindly click here for the full report.