June 17, 2019/Cordros Report
The Nigerian equities market kick-started the week on a bearish note as the benchmark index declined by 0.37% to 29,936.33, following selloffs in bellwether stocks.
Thus, the Month-to-Date and Year-to-Date losses increased to 0.37% and 4.75% respectively.
On sectoral performance, losses in the Industrial Goods (-0.53%) index masked gains in the Insurance (+0.49%), Oil & Gas (+0.30%), Consumer Goods (+0.38%) and Banking (+0.16%) indices. Notable stocks include DANGCEM (-0.87%), WAPIC (+9.67%), FO (+9.86%), UNILEVER (+3.23%) and ZENITHBANK (+1.00%) respectively.
Market breadth was negative, with 20 losers and 16 gainers, led by ROYALEX (-8.33%) and PRESTIGE (+10.00%) shares, respectively. Total volume of trades declined to 2.86 billion units, valued at NGN3.92 billion, and exchanged in 3,360 deals.
In the absence of a positive catalyst, we guide investors to trade cautiously in the short term. However, stable macroeconomic fundamentals and compelling valuation remain supportive of recovery in the mid-to-long term.
The USD/NGN was flat at NGN360.50 at the I&E FX window, and at NGN361.00 at the parallel market. Total turnover in the IEW decreased by 3.92% to USD 199.10 million, with trades consummated within the NGN357.50 – NGN361.50/ USD band.
MONEY MARKET & FIXED INCOME
The overnight lending rate expanded by 372 bps to 9.43%, as banks funded for the weekly FX wholesale auction.
Activities in the treasury bills market were mixed, albeit with a bearish bias, as average yield expanded by 3 bps to 12.45%. Sell pressure was concentrated at the long (+136 bps) segment, with yield on the 199DTM (+23 bps) bill recording the largest expansion. Conversely, demand for the 73DTM (-44 bps) and 108DTM (-50 bps) bills led to respective yield contractions at the short (-8 bps) and mid (-7 bps) segments.
Trading in the bond market was similarly mixed, with a bearish tilt, as average yield expanded by 4 bps to close at 14.33%. Sell pressure was concentrated at the short (+8 bps) and long (+7 bps) ends of the curve, with respective yields on JUL-2021 (+24 bps) and APR-2037 (+17 bps) bonds expanding. Conversely, demand for FEB-2028 (-9 bps) bond, led to yield contraction at the mid (-4 bps) segment.