July 31, 2019/Cordros Report

EQUITIES

The Nigerian equities market sustained losses from previous trading session following significant sells-offs in large cap Consumer Goods (DANSUGAR, NB, NESTLE) stocks. Consequently, the benchmark index dipped by 0.37% to 27,718.26 points, while the Month-to-Date and Year-to-Date losses worsened to -7.50% and -11.81% respectively.

However, the total volume of trades increased by 62.31% to 251.93 million units, valued at NGN4.13 billion, and exchanged in 3,937 deals. ZENITHBANK was the most traded stock by volume at 39.14 million units, while MTNN was the highest traded by value of NGN725.21 billion respectively.

Significant losses in the Consumer Goods (-3.52%) and Oil & Gas (-0.02%) indices outweighed gains from Insurance (+0.87%), Banking (+0.71%) and Industrial Goods (+0.27%) indices. Market sentiment, as measured by market breadth, was balanced (1.00x) as 20 tickers recorded losses and gains respectively. On the laggards list, UPL (-10.00%) and BERGER (-9.52%) recorded the largest declines, while JBERGER (+9.87%) and FO (+9.17%) recorded the largest gains.

Amidst mixed corporate earnings, our outlook for equities in the short to medium term remains conservative.
 
CURRENCY
 
The naira traded flat against the US dollar at NGN360.00/USD in the parallel market, while it appreciated by 0.2% to NGN361.68/USD at the I&E FX window.
 
MONEY MARKET AND FIXED INCOME
 
The overnight lending rate declined by 121 bps to 4.00%, amidst buoyant system liquidity.
 
Activities in the Treasury bills market were bearish, as average yield widened by 12bps to 11.17%. A sell-off on the 267DTM (+35bps) bill led to yield expansion at the long (+22bps) end of the curve. Yield at the short and the mid segments closed flat. At today’s primary market auction, the CBN fully allotted NGN223.23billion worth of instruments – NGN28.01 billion of the 91DTM, NGN33.68 billion of the 182DTM, and NGN161.52 billion of the 364DTM – at respective stop rates of 9.75% (previously 9.74%), 10.60% (previously 10.70%) and 11.18% (previously 11.14%).
 
Trading in the bond market were mixed albeit with a bearish tilt, as the average yield expanded by 2bps to 13.37%. Sell-offs on the MAR-2024 (+79bps) and MAR-2027 (+16bps) bond led to yield expansion at the short (+1bp) and mid (+6bps) segments. Conversely, demand for the MAR-2036 (-9bps) bond, led to yield contraction at the long (-3bps) end of the curve.

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