May 2, 2019/Cordros Report
EQUITIES
The Nigerian equities market halted its 3-day bearish run to close on a positive note as the benchmark index increased by a marginal 0.04% to 29,171.73 points, driven by gains in bellwether Consumer Goods stocks.
Thus, the Month-to-Date and the Year-to-Date losses moderated to -1.91% and -7.19% respectively.
On sectoral performance, the Industrial Goods (+0.46%), Consumer Goods (+0.39%), Insurance (+0.35%), and Oil & Gas (+0.07%) indices gained, while the Banking index (-0.52%) closed in red. Notable stocks include CCNN (+4.29%), NB (+1.15%), NEM (+2.67%), MOBIL (+5.08%) and UBA (-2.21%), respectively.
Market breadth was negative, with 26 losers and 21 gainers, led by AFROMEDIA (-10.00%) and TRANSCORP (+9.91%) stocks, respectively. Total volume of trades decreased by 48.49% to 279.61 million units, valued at NGN2.82 billion, and exchanged in 4,836.00 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 depreciated by 0.08% to NGN360.91 in the I&E FX window, but closed flat at NGN360.00 at the parallel market. Total turnover in the IEW increased by 6.39% to USD176.34 million, with trades consummated within the NGN345-NGN362.00/USD band.
MONEY MARKET & FIXED INCOME
The overnight lending rate moderated by 254 bps to 7.29% as today’s inflow of matured OMO bills (NGN62.80 billion) boosted system liquidity.
Activities in the treasury bills market were mixed, but with a bullish tilt, as average yield compressed 2 bps to close at 13.07%. Demand for the 91DTM (-70 bps) and 105DTM (-27bps) led to yield contraction at the short (-11 bps) and mid (-8 bps) segments of the curve, respectively Conversely, a sell off of the 336DTM (+16 bps) led to yield expansion at the long (+2 bps) end of the curve. At today’s primary auction, the CBN fully allotted NGN109.71 billion – NGN28.02 billion of the 91DTM, NGN10.62 billion of the 182DTM, and NGN71.07 billion of the 364DTM – worth of bills at respective stop rates of 10.00% (previously 10.1499%), 12.49% (previously 12.50%), and 12.77% (previously 12.74%).
Trading in the bond market was also mixed, with a bullish tilt, as average yield contracted by 2 bps to close at 14.23%. Demand for the JUN-2019 (-15 bps) and MAR-2036 (-6 bps)
bonds led to yield contraction at the short (-4 bps) and long (-2 bps) ends of the curve, respectively. On the flip side, sell pressure was concentrated at the mid (+2 bps) segment, with yield on the MAR-2027 (+10 bps) bond expanding.
