September 7, 2020/Cordros Report

EQUITIES

Nigerian stocks closed lower at the start of the week, halting six sessions of successive gains, as profit-taking ensued. GUARANTY (-2.5%) and DANGSUGAR (-3.6%) were the major movers of the market, dragging the benchmark index down by 0.1% to 25,582.23 points. Accordingly, the Month-to-Date gain moderated to 1.0% while Year-to-Date loss increased to -4.7%.
 
The total volume of trades declined by 39.2% to 254.97 million units, valued at NGN2.00 billion and exchanged in 4,699 deals. UBA was the most traded stock by volume at 44.35 million units, while ZENITHBANK was the most traded stock by value at NGN536.11 million.
 
Across sectors, the Insurance (+0.7%) and Oil & Gas (+0.2%) indices recorded gains, while the Banking (-0.7%) and Consumer Goods (-0.4%) indices recorded losses. The Industrial Goods index was flat.
 
Market sentiment, as measured by the market breadth, was positive (1.1x), as 16 tickers gained relative to 15 losers. ETERNA (+9.1%) and NEM (+8.7%) topped the gainers’ list, while HONYFLOUR (-6.3%) and CHAMS (-4.6%) recorded the largest losses of the day.
 
CURRENCY
The naira was flat at the I&E window at NGN386.00/USD while it weakened by 1.1% to NGN445.00 in the parallel market.

MONEY MARKET & FIXED INCOME

The overnight lending rate was unchanged at 2.25%, as system liquidity –estimated at NGN737.72 billion— remains healthy.
 
Trading in the NTB secondary market was bearish, as average yield expanded by 6bps to 2.0%. Across the curve, yield expanded at the short (+24bps) end, following sell-offs of the 80DTM (+58bps) instrument, while they contracted at the mid (-8bps) segment, due to demand for the 115DTM (-39bps) instrument; yield was flat at the long end. On the other hand, average yield contracted by 6bps to 2.8% at the OMO secondary market.
 
Elsewhere, trading in the Treasury bond secondary market was bullish, as average yield contracted by 10bps to 7.9%. Across the curve, yield contacted at the short (-11bps), mid (-10bps) and long (-9bps) segments, following buying interests in the JAN-2022 (-30bps), MAR-2027 (-39bps) and MAR-2036 (-28bps) bonds, respectively.

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