April 29, 2019/Cordros Report
EQUITIES
The Nigeria’s equities market started the week on a bearish note as the benchmark index declined by 0.74% to 29,521.06 points, driven by sell-offs across the Industrial Goods and Banking stocks.
Hence, the Month-to-Date and the Year-to-Date losses increased to 4.90% and 6.07% respectively.
On sectoral performance, losses in the Industrial Goods (-2.96%), Banking (-1.15%) and Oil & Gas (-1.12%) indices masked gains across the Insurance (+1.64%) and Consumer Goods (+0.25) indices. Notable stocks include GUARANTY (-2.19%), TOTAL (-8.74%), DANGCEM (-0.48%), DANGFLOUR (+9.97%) and NEM (+7.46%).
Market breadth was negative, with 26 losers and 25 gainers, led by CCNN (-9.76%) and DANGFLOUR (+9.97%) shares, respectively. Total volume of trades increased by 18.65% to 290.18 million units, valued at NGN2.16 billion, and exchanged in 4,302.00 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 0.04% to NGN360.79 in the I&E FX window, but closed flat at NGN360.00 at the parallel market. Total turnover in the IEW decreased by 68.24% to USD165.75 million, with trades consummated within the NGN356.00-NGN361.15/USD band
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MONEY MARKET & FIXED INCOME
The overnight lending rate expanded by 129 bps to 18.57% following CBN’s FX wholesale auction which squeezed system liquidity.
Sentiments in the treasury bills market were mixed, albeit with a bullish tilt as average yield fell marginally (-2 bps) to close at 13.09%. Buy sentiment was concentrated at the short (-17 bps) end of the curve, with the 38DTM (-123 bps) recording the most significant contraction. Conversely, selloffs of the 168DTM (+14 bps) and 297DTM (+14bps) bills led to respective yield expansions at the mid (+1bps) and long (+2bps) segments.
Activities in the bond market were bearish, as average yield was flat at 14.25%. Sell pressure was concentrated at the long (+5bps) end of the curve, with yield on the JUL-2034 (+15 bps) bond expanding, while the mid segment was flat. On the flip side, demand for the JAN-2022 (-13bps) bonds led to yield contraction at the short (-2bps) end of the curve.
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