April 24, 2019/Cordros Report

EQUITIES

The Nigerian equities market closed the second trading session of the week on a negative note as the benchmark index declined by 0.59% to 29,898.231 points, driven by a sell-off of some large-cap stocks

Thus, the Month-to-Date and the Year-to-Date losses increased to 3.68% and 4.87%, respectively.

On sectoral performance, the Oil & Gas (-3.61%), Consumer Goods (-1.10%), and Industrial Goods (-0.70%) indices recorded losses, while the Banking (+0.93%) and Insurance (-0.84%) indices closed in the green. Notable stocks include SEPLAT (-4.39%), NESTLE (-1.90%), DANGCEM (-0.94%), ZENITHBANK (+2.15%) and AIICO (+5.63%), respectively.

Market breadth was positive, with 26 gainers and 14 losers, led by DANGFLOUR (+9.78%) and CONOIL (-9.57%), respectively. Total volume of trades decreased by 3.6% to 304.86 million units, valued at NGN2.63 billion and exchanged in 3,902 deals.

In the absence of a positive catalyst, we guide investors to trade cautiously in the short term. However, stable macroeconomic fundamentals and compelling valuation remain supportive of recovery in the mid-to-long term.

CURRENCY

The USD/NGN appreciated by 0.08% to NGN360.23 in the I&E FX window, but closed flat at NGN360.00 at the parallel market. Total turnover in the IEW decreased by 49.90% to USD141.02 million, with trades consummated within the NGN350.00-NGN362.00/ USD band.

MONEY MARKET AND FIXED INCOME

The overnight lending rate moderated by 563 bps to12.86%, in the absence of any significant outflows.

Sentiments in the Treasury bills market were bullish, as average yield moderated by 4 bps to 13.16%. Buy sentiment was evident at the mid (-9 bps) and long (-6 bps) segments, with yields on the 176DTM (-28 bps) and 239DTM (-35 bps) bills contracting, respectively. Conversely, yield at the short (+9 bps) segment expanded, on the backdrop of a selloff of the 15DTM (+146 bps) bill.

Proceedings in the bond market were bullish, as yields fell by 6 bps, on average, to 14.15%. Demand was evident across the short (-7 bps), mid (-3 bps) and long (-11 bps) segments of the curve, with respective yields on the JUN- 2019 (-30 bps) JUL-2030 (-7 bps) and APR-2037(-18 bps) bonds contracting. At today’s primary auction, the DMO allotted NGN97.40 billion – NGN6.81 billion of the APR-2023 (re-opening), NGN37.43 billion of the APR-2029 (new-issue) and NGN53.16 billion of the APR-2049 (new-issue) – in bonds to investors, at respective stop rates of 14.50% (vs. 13.50% at the previous auction), 14.55%, and 14.80%, respectively.

Click here to read full PDF copy of report