Stocks Close Positive on Bargain Hunting in Bellwether Counters

October 12, 2017/Cordros Research

EQUITIES

  • The domestic bourse closed positive, with the ASI appreciating by 0.22% to 36,732.24 points, as investors hunted bargains in value stocks.
  • Accordingly, the Month-to-Date and Year-to-Date returns improved to 3.65% and 36.68% respectively.
  • Performance across sectors was broadly positive, with the Insurance (+2.06%), Consumer Goods (+0.61%), Oil and Gas (+0.22%), and Industrial Goods (+0.01%) indices recording gains, as investors demanded for the shares of MANSARD (+2.31%), FLOURMILL (+1.75%), FO (+2.04%), and FIRSTALUM (+4.00%), respectively. On the flip side, the Banking (-0.32%) index closed negative, following a selloff of UBN (-4.17%) stock.
  • Meanwhile, market breadth was positive with 30 gainers and 13 losers, led by MANSARD (+6.49) and UPL (-4.90%). Total volume traded increased by 31.89% to 443.68 million units, valued at N3.18 billion, and exchanged in 2,993 deals.
  • We believe the market remains fundamentally strong – amid broadly bullish outlook for the economy and Q3-17 corporate earnings.

CURRENCY

  • In the parallel market, the LCY remained flat against the USD at N363, while it appreciated by 0.05% to N360.52 in the I&E FX window. Total volume traded in the I&E FX window yesterday was USD252.56 million (today’s data was unavailable at the time of writing).

FIXED INCOME AND MONEY MARKET

  • The overnight money market rate dropped 1,842 bps to 25.92%, on the back of improved system liquidity, following the inflow from matured OMO bills (worth N61.59 billion) which subdued the impact of the outflow recorded in today’s OMO auction (worth N64.18 billion).
  • Activities in the treasury bills market turned bullish — supported by improved system liquidity — as average yield contracted by 5 bps to 17.07%. Yields moderated at the mid and long ends of the curve, while selloffs caused yield expansion at the short segment. The notable bills include 155-DTM (-12 bps), 344-DTM (-45 bps), and 85-DTM (+135 bps), respectively.
  • Proceedings in the bond market remained bullish, with average yield contracting 8 bps to 14.88%. Yields declined at the mid and long ends of the curve, owing to demand for the 13-FEB-2020 and 18-APR-2037 bonds, while yield expanded at the short segment driven by the 29-JUN-2019 bond.

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