September 3, 2020/Cordros Report

EQUITIES

For the fifth straight session, the domestic equities market traded with bullish sentiments, as investors’ interest in MTNN (+0.5%) and some banking stocks drove the market higher. Thus, the All-Share Index advanced by 0.2% to 25,511.02 points. Accordingly, the Month-to-Date gain increased to +0.7% while Year-to-Date loss moderated to -5.0%.
 
The total trade volume increased by 28.2% to 232.42 million units, valued at NGN1.32 billion and exchanged in 3,377 deals. TRANSCORP was the most traded stock by volume at 70.62 million units while ZENITHBANK was the most traded stock by value at NGN435.19 million.
 
On sectors, the Insurance (+0.5%) and Banking (+0.5%) indices gained while the Consumer Goods, Industrial Goods and Oil & Gas indices were flat.
 
Market sentiment, as measured by the market breadth, was positive (3.2x), as 19 tickers gained relative to 6 losers. UAC-PROP (+8.3%) and LINKASSURE (+7.7%) topped the gainers’ list while NEIMETH (-6.5%) and AIICO (-5.3%) recorded the largest losses of the day.
 
CURRENCY

The naira weakened by 0.1% to NGN386.25/USD at the I&E window while it was flat at NGN440.00 in the parallel market.

MONEY MARKET & FIXED INCOME

The overnight lending rate contracted by 208bps to 3.25%, as inflows from OMO maturities (NGN321.48 billion) came into the system.
 
Trading in the NTB secondary market was bearish, as average yield expanded by 5bps to 2.1%. Across the curve, yield expanded at the mid (+17bps) segment, following sell-offs of the 161DTM (+79bps) instrument, while they were flat at the short and long ends. On the other hand, average yield contracted by 15bps to 2.8% at the OMO secondary market, as market participants looked to cover for lost bids at today’s OMO auction. At the auction, the CBN offered bills worth NGN100.00 billion, with allotments of NGN10.00 billion of the 82-day, NGN10.00 billion of the 180-day and NGN80.00 billion of the 355-day – at respective stop rates of 4.86% (previously 4.87%), 7.68% (previously 7.68%), and 8.94% (previously 8.94%).
 
Despite the increased liquidity in the Treasury bond secondary market, sentiment was weak, as investors have become wary of bonds at this level. Thus, average yield expanded by 4bps to 8.1%. Across the curve, yield pared at the short (-1bp) and mid (-2bps) segments, following buying interests in the MAR-2025 (-2bps) and FEB-2028 (-23bps) bonds, respectively, while they expanded at the long (+11bps) end, due to a sell-off of the MAR-2050 (+24bps) bond.

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