April 25, 2019/Cordros Report

EQUITIES

The Nigerian equities market halted its two-day bearish run to close on a positive note today as the benchmark index increased by 0.07%, to 29,919.44 points, driven by gains in bellwether Banking and Consumer Goods stocks.

Thus, the Month-to-Date and the Year-to-Date losses moderated to -3.61% and -4.81% respectively.

On sectoral performance, gains in Banking (+0.12%), Consumer Goods (+0.04%) and Oil & Gas (+2.85%) indices were enough to offset the losses in Industrial Goods (-0.19%), and Insurance (-0.33%) indices. Notable stocks include GUARANTY (+0.88%), NB (+1.56%), SEPLAT (+4.22%), DANGCEM (-0.63%) and SOVRENINS (-8.00%).

Market breadth was positive, with 19 gainers and 17 losers, led by CUTIX (+10.00%) and GUINNESS (- 10.00%) shares, respectively. Total volume of trades increased by 85.8% to 566.50 million units, valued at NGN7.27 billion, and exchanged in 4,103 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 depreciated by 0.13% to NGN360.69 in the I&E FX window, but closed flat at NGN360.00 at the parallel market. Total turnover in the IEW increased significantly by 4.73% to USD274.11 million, with trades consummated within the NGN357.00- NGN361.40/USD band.

MONEY MARKET & FIXED INCOME

The overnight lending rate moderated by 557 bps to 7.29% following inflows from matured OMO bills worth NGN46.25 billion

Sentiments in the Treasury bills market were bullish, as average yield compressed by 11 bps to 13.05%. Buy sentiment was evident across all segments –short (-16 bps), mid (-4 bps) and long (-12 bps) — of the curve, with yields on the 35DTM (-91 bps), 98DTM (-29 bps) and 224 DTM (-30 bps) respectively.

Activities in the bond market were bearish as average yield rose by 4 bps to 14.19%. Sell pressure was spread across the mid (+7 bps) and long (+7 bps) segments, with yield on the MAR-2024 (+33 bps) and MAR-2037 (+16 bps) bonds expanding, respectively. Yield at the short end of the curve was flat.

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