January 20, 2021/Cordros Report

EQUITIES

Trading in the domestic equities market retraced in today’s session, as the benchmark index advanced by 0.2% to 41,147.72 points following investors’ interests in WAPCO (+8.2%), UBA (+2.3%) and TRANSCORP (+9.4%) stocks. Consequently, Month-to-Date and Year-to-Date returns increased to +2.2%.

The total volume traded increased by 23.7% to 649.65 million units, valued at NGN4.61 billion, and exchanged in 6,296 deals. MBENEFIT was the most traded stock by volume at 52.11 million units, while WAPCO was the most traded stock by value at NGN900.09 million.

Performance across sectors was broadly positive as all sectors in our coverage save for the Banking (-0.2%) index recorded gains. The Insurance (+2.5%) index was the highest gainer, followed by the Industrial Goods (+0.5%), Oil & Gas (+0.5%) and Consumer Goods (+0.2%) indices.

Market sentiment, as measured by market breadth, was positive (3.9x), as 55 tickers gained, relative to 14 losers. MBENEFIT (+10.0%) and NIGERINS (+10.0%) topped the gainers’ list, while MANSARD (-10.0%) and AFROMEDIA (-9.1%) recorded the largest losses of the day.

CURRENCY                   

The naira weakened by 0.2% to NGN394.17/USD at the I&E window but remained flat in the parallel market at NGN475.00/USD.

MONEY MARKET & FIXED INCOME

The overnight lending rate expanded by 50bps to 1.0%, in the absence of any significant inflows into the system.

Activities at the NTB secondary market were bearish, as average yield expanded by 9bps to 0.5%. Across the curve, average yield expanded at the mid (+1bp) and long (+19bps) segments, following sell-off of the 141DTM (+10bps) and 358DTM (+55bps) instruments, respectively. Conversely, average yield contracted slightly at the short (-1bp) end, as market participants bought up the 85DTM (-4bps) instrument. Similarly, average yield expanded by 2bps to 0.8% at the OMO secondary market.

Mixed sentiments ensued in the Treasury bonds secondary market as investors were focused on the activity at the primary market. Thus, average yield expanded slightly by 1bp to 6.6%. At the PMA, the DMO offered instruments worth NGN150.00 billion to investors through three re-openings – 16.288% MAR 2027 (Bid-to-offer: 1.8x; Stop rate: 7.9800%), 12.50% MAR 2035 (Bid-to-offer: 2.1x; Stop rate: 8.7400%) and 9.80% JUL 2045 (Bid-to-offer: 0.8x; Stop rate: 8.9500%). Despite a total subscription of NGN238.27 billion, the DMO eventually allotted instruments worth NGN122.36 billion, resulting in a bid-cover ratio of 1.9x.

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