January 21, 2019/Cordros Update
The Nigerian equities market bucked its positive run, after seven consecutive sessions of gains. Specifically, the benchmark index dipped by 0.88% to 30,732.72 points.
Therefore, the Month-to-Date loss notched higher to 2.22%.
On sectoral performance, the Oil & Gas (-4.55%) and Banking (-0.14%) indices closed negative, driven by SEPLAT (-7.99%) and GUARANTY (-0.78%), respectively. Meanwhile, the Industrial (+0.97%) and Insurance (+1.51%) indices were positive, following gains in CCNN (+7.17%) and NEM (+4.84%). The Consumer Goods index was flat.
Market breadth was negative with 18 losers and 13 gainers, led by ETRANZACT (-8.71%) and LINKASSURE (+8.93%) stocks respectively. Meanwhile, total volume and value traded surged by 66.0% and 46.9% to 231.01 million units and NGN5.53 billion respectively, and exchanged in 3,874 deals.
We reiterate our negative outlook for the equities market in the short to medium term, amidst political concerns ahead of the 2019 elections, and the absence of a positive market trigger. However, positive macroeconomic fundamentals remain supportive of recovery in the long term.
The USD/NGN appreciated by 0.09% to NGN362.46 at the I&E FX window, but remained flat at NGN362.00 in the parallel market. Total turnover in the IEW moderated by 30.3% to USD406.07 million, with trades executed within the NGN360.00-365.80/USD band.
FIXED INCOME AND MONEY MARKET
The overnight lending rate surged by 1,100 bps to 27.17%, from 16.17% last Friday, amidst funding for the FX wholesale auction, and the CBN’s OMO auction wherein NGN20.49 billion – NGN12.63 billion of the 94DTM, NGN27.37 billion of the 178DTM, and NGN139.60 billion of the 353DTM bill – worth of bills were sold at respective stop rates of 11.90%,13.50% and 15.00%.
Activities in the treasury bills market were bullish, as average yield compressed by 12 bps to 14.79%. Yield at the short (+20 bps) and long (-15 bps) ends of the curve contracted, while yield at the mid (+5 bps) segment widened. Notable bills include the 59DTM (-80 bps), 255DTM (+21 bps), and 150DTM (+65 bps), respectively.
Trading in the bond market was mixed as average yield closed flat at 15.19%. Yield at the mid (-1 bp) segment contracted on the back of demand for the JAN-2026 (-10 bps) bond. Yields at the short and long ends of the curve were flat.
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