October 6, 2020/Cordros Report

Bargain buying of large cap stocks continued in the domestic bourse, as investors continue to seek real returns, amidst abysmal fixed income yields. Thus, investors’ interest in DANGCEM (+9.9%) and MTNN (+5.7%) amongst others, drove the benchmark index higher by 4.9% to 28,909.37 points – the largest gain in the benchmark index since April 1, 2015. Consequently, Month-to-Date gain and Year-to-Date gain increased to 7.7% respectively.
 
The total volume of trades increased by 24.1% to 749.47 million units, valued at NGN9.50 billion and exchanged in 8,075 deals. ZENITHBANK was the most traded stock by volume and value at 135.70 million units and NGN2.77 billion, respectively.
 
Sectoral performance was positive – the Banking (+7.5%) index recorded the biggest gain, followed by the Industrial Goods (+5.6%), Consumer Goods (+3.0%), Oil & Gas (+1.2%) and Insurance (0.3%) indices.
 
Market sentiment, as measured by the market breadth, was positive (5.6x), as 45 tickers gained relative to 8 losers. CORNERST (+10.0%) and INTBREW (+10.0%) topped the gainers’ list while NPFMCRFBK (-8.8%) and WAPIC (-7.7%) recorded the largest losses of the day.
 
CURRENCY

The naira was flat at the I&E window at NGN386.00/USD, while it appreciated by 0.4% to NGN458.00/USD in the parallel market.

MONEY MARKET & FIXED INCOME

The overnight lending rate declined by 6bps to 1.5%, in the absence of any significant outflow from the system.
 
Trading in the NTB secondary market was bullish, as average yield declined by 37bps to 1.5%. Across the curve, average yield contracted at the short (-9bps), mid (-6bps) and long (-71bps) segments, due to demand for the 37DTM (-16bps), 100DTM (-13bps) and 219DTM (-84bps) instruments, respectively. Elsewhere, average yield was flat at 1.7% at the OMO secondary market.
 
At the Treasury bond secondary market, trading was bullish, as average yield declined by 5bps to 6.7%. Across the curve, average yield at the short (-31bps) and mid (-26bps) segments contracted, due to demand for the MAR-2025 (-106bps) and APR-2029 (-58bps) bonds, respectively, while they expanded at the long (+30bps) end, following sell-off of the MAR-2050 (+88bps) bond.

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