May 30, 2019/Cordros Report
EQUITIES
The Nigeria’s equity market halted gains from the previous trading session as the benchmark index shed 0.17% to 31,254.19 points, driven by sell-offs across major counters.
Thus, the Month-to-Date return moderated to 7.18%, while the Year-to-Date loss increased to 0.56%.
On sectoral performance, losses were evident across all sectors as the Banking (-1.93%), Consumer Goods (-0.58%), Oil & Gas (+0.32%), insurance (0.14%) and Industrial Goods (-0.04%) indices closed negative. Notable stocks include GUARANTY (-3.03%), UNILEVER (8.01%), FO (3.93%), AIICO INSURANCE (4.41%) and DANGCEM (-0.89%).
Market breadth was positive, with 20 gainers and 19 losers, led by JAPAULOIL (-10.0%) and LIVESTOCK (+9.26) respectively. Total volume of trades increased by 9.44% to 376.80 million units, valued at NGN 5.89 billion and exchanged in 4,549 deals.
Our outlook for equities in the short to medium term remain conservative, amidst absence of a positive catalyst. However, stable macroeconomic fundamentals remain supportive of recovery in the long term.
CURRENCY
The USD/NGN depreciated by 0.02% to NGN360.72 in the I&E FX window, but closed flat at NGN361.00 at the parallel market. Total turnover in the IEW decreased by 35.4% to USD88.43 million, with trades consummated within the NGN356.00-NGN364.50/USD band.
MONEY MARKET & FIXED INCOME
The overnight lending rate declined by 693 bps to 6.50%, as today’s inflow of matured OMO bills (NGN133.56 billion) boosted system liquidity.
Activities in treasury bills market were bullish as average yield compressed 7 bps to close at 12.10%. Demand for the 17DTM (-155 bps) and 94DTM (-50 bps) bills led to yield contraction at the short (-18 bps) and mid (-11 bps) segments, respectively. On the flip side, a sell-off of the 262DTM (+38 bps) bill led to yield expansion at the long (+1 bp) end of the curve. At today’s primary auction, the CBN fully allotted NGN67.37 billion – NGN24.37 billion of the 91DTM, NGN23.16 billion of the 182DTM, and NGN19.84 billion of the 364DTM – worth of bills at respective stop rates of 10.00% (same as previous auction), 11.95% (previously 12.30%), and 12.20% (previously 12.49%).
Activities in the bond market were mixed, albeit with a bearish bias, as average yield widened by 1 bp to 13.84%. Sell pressure was evident across the short (+1 bp), mid (+2 bps) and long (+1 bp) segments, with yields on the the JUL-2021 (+28 bps), JAN-2026 (+9 bps) and JUL- 2034 (+4 bps) bonds expanding, respectively.
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