Daily Market Update for July 8, 2020-Cordros

July 8, 2020/Cordros Report

EQUITIES

Trading in the domestic bourse remained positive, as continued demand for Tier 1 bank stocks and WAPCO (+10.0%) spurred the biggest gain in the market since 26th June 2020. Precisely, the All-Share Index advanced by 0.8% to 24,278.07 points. Accordingly, Month-to-Date and Year-to-Date losses moderated to -0.8% and -10.0%, respectively.

The total volume of trades increased by 49.6% to 232.61 million units, valued at NGN4.70 billion and exchanged in 3,523 deals. FIDELITYBK was the most traded stock by volume at 37.95 million units while MTNN was the most traded stock by value at NGN3.22 billion.

Sector performance was broadly positive, following gains in the Banking (+3.4%), Insurance (+1.1%) and Industrial Goods (+0.1%) indices. The Consumer Goods (-0.2%) and Oil & Gas (-0.2%) indices recorded losses.

Market sentiment, as measured by market breadth, was positive (3.1x), as 25 tickers gained, relative to 8 losers. WAPCO (+10.0%) and JBERGER (+9.9%) were the top gainers of the day, while BERGER (-9.6%) and CAVERTON (-4.4%) recorded the largest losses.

CURRENCY

The naira weakened at the I&E window by 0.1% to NGN386.75/USD while it was flat at the parallel market at NGN461.00/USD.

MONEY MARKET & FIXED INCOME

The overnight lending rate contracted by 50bps to 21.0%, amid still thin system liquidity.
 
The NTB secondary market was bullish, as average yield contracted by 7bps to 2.1%. Across the curve, yields contracted at the mid (-23bps) segment, due to demand for the 141DTM (-47bps) instrument; yields were flat at the short and long ends. Conversely, average yield expanded by 16bps to 5.4% at the OMO secondary market.
 
Trading in the Treasury bond secondary market was bullish, as average yield contracted by 13bps to 7.7%. Across the curve, yield contracted at the short (-27bps) and long (-7bps) ends, as investors demanded the JUL-2021 (-96bps) and MAR-2050 (-21bps) bonds, respectively; yield at the mid-segment was flat.

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