May 22, 2019/Cordros Report
EQUITIES
The bulls continued to dominate on the domestic bourse as the benchmark index rose by 3.07% to 31,145.15 points, with buying interest in DANGCEM and MTNN continuing to drive the market.
Thus, the Month-to-Date return grew to 6.81% while the Year-to-Date loss moderated to -0.91%.
On sectoral performance, losses were evident across all sectors – save for the Industrial Goods (+4.50%) – as the Consumer Goods (-3.57%), Banking (-2.67%), Oil & Gas (-0.27%), and Insurance (-0.05%) indices closed in red. Notable stocks include DANGCEM (+9.73%), NESTLE (-7.69%), GUARANTY (-2.56%), OANDO (-2.15%) and CUSTODIAN (-0.85%), respectively.
Market breadth was negative, with 28 losers and 12 gainers, led by LAWUNION (-9.09%) and MTNN (+9.98%) shares, respectively. Total volume of trades decreased by 12.22% to 294.57 million units, valued at NGN17.47 billion and exchanged in 4,835 deals.
We expect the rally in the equities market to persist in the short term, following sustained interest in MTNN shares.
CURRENCY
The USD/NGN depreciated by 0.11% to NGN360.80 in the I&E FX window, but closed flat at NGN361.00 at the parallel market. Total turnover in the IEW increased by 64.61% to USD138.41 million, with trades consummated within the NGN357.50-NGN361.50/USD band.
MONEY MARKET & FIXED INCOME
The overnight lending rate was flat at 5.29%, amidst still buoyant liquidity.
Sentiments in the Treasury bills market were bullish, as average yield moderated by 7 bps to 11.98%. Buy sentiment was evident at the mid (-19 bps) and long (-5 bps) segments, with yields on the 136DTM (-89 bps) and 234DTM (-32 bps) bills contracting, respectively. Conversely, yield at the short (+3 bps) segment expanded, on the backdrop of a selloff of the 31DTM (+28 bps) bill.
Proceedings in the bond market were also bullish, as yields compressed by 4 bps, on average, to 13.83%. Demand was evident across the short (-6 bps) and mid (-5 bps) segments of the curve, with respective yields on the FEB-2020 (-51 bps) and FEB-2028 (-14 bps) bonds contracting. Yield at the long end of the curve was flat. At today’s primary auction, the DMO allotted NGN100.00 billion – NGN35.00 billion of the APR-2023 (re-opening), NGN35.00 billion of the APR-2029 (re-opening) and NGN30.00 billion of the APR-2049 (re-opening) – in bonds to investors, at respective stop rates of 14.11% (vs. 14.50% at the previous auction), 14.24% (vs. 14.55% at the previous auction) and 14.49% (vs. 14.80% at the previous auction). Stop rates fell by 34 bps on average, amidst strong demand — auction recorded NGN171 billion oversubscription, highest since April 2018 auction, and bid cover of 2.44x (vs NGN49.30 billion and 1.53x, respectively, at the previous auction)
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