June 6, 2019/Cordros Report
EQUITIES
Trading resumed on the domestic bourse, after the two-day holiday, with the benchmark index (-1.30%) extending its bearish run to close at 30,527.07 points, as DANGCEM’s price was adjusted for dividend.
Thus, the Month-to-Date and Year-to-Date losses increased to 1.75% and 2.87% respectively.
On sectoral performance, all sectors closed in the red — save for the Oil & Gas (+2.03%) index — with the Industrial Goods (-2.80%), Insurance (-2.05%), Banking (-0.66%) and Consumer Goods (-0.09) indices declining. Notable stocks include SEPLAT (+2.68%), DANGCEM (-5.41%), NEM (-8.07%), GUARANTY (-1.92%), and GUINNESS (-2.06%) respectively.
Market breadth was positive, with 22 gains and 15 losers, led by JBERGER (+9.90%) THOMASWY (-10.00%) shares, respectively. Total volume of trades declined by 11.96% to 217.33 million units, valued at NGN5.82 billion, and exchanged in 3,686 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 was flat at NGN360.76 and NGN361.00 at the I&E FX window and in the parallel market, respectively. Total turnover in the IEW decreased by 13.3% to USD184.75 million, with trades consummated within the NGN345.00-NGN362.00/USD band.
MONEY MARKET & FIXED INCOME
The overnight lending rate contracted by 100 bps to 9.21% following inflows from matured OMO bills (NGN177.60 billion). The CBN mopped up NGN157.98 billion via OMO auction, selling NGN0.07 billion of the 98DTM, NGN2.13 billion of 175DTM, and NGN155.78 billion of 364DTM bills at respective stop rates of 11.40% (same as previous auction), 11.63% (previously 11.64%), and 12.48% (same as previous auction).
Activities in the treasury bills market were bearish, following the liquidity mop up, as average yield expanded by 20 bps to 12.65%. Selloffs were spread across the mid (+31bps) and long (+23 bps) segments, with respective yields on the 157DTM (+72 bps) and 227DTM (+56 bps) bills expanding. Conversely, demand for 87DTM (-24 bps) bill led to yield contraction at the short (-4 bps) end of the curve.
Trading in the bond market was also bearish as average yield expanded by 20 bps to close at 14.07%. Sell pressure was spread across the short (+31 bps), mid (+15 bps) and long (+10 bps) segments, with respective yields on the JUN-2019 (+98 bps), JUL-2030 (+29 bps) and MAR-2036 (+41 bps) bonds expanding.
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