WED, APRIL 25 2018-theG&BJournal-Equities market turned bearish today, with the ASI dipping by 0.12% to 40,772.26 points. Accordingly, the Month-to-Date and Year-to-Date returns moderated to -1.80% and 6.57% respectively.
The Industrial Goods (-1.42%) index recorded the largest loss, followed by the Insurance (-0.76%) index, owing to selloffs of WAPCO (-1.97%) and CONTINSURE (-4.43%) shares respectively. On the flip side, the Oil & Gas (+2.33%), Consumer Goods (+1.74%), and Banking (+0.16%) indices closed in the green, following gains in the shares of FO (+10.16%), NESTLE (+4.99%), and GUARANTY (+0.58%), respectively.
Market breadth turned positive, with 23 gainers and 22 losers, led by FO (+10.16%) and FBNH (-8.96%) respectively. Meanwhile, volume and value of trades grew by 42.34% and 42.93% to 350.98 million units and NGN4.60 billion respectively, exchanged in 5,020 deals.
While continued volatility suggests cautious trading, we reiterate our medium-to-long term positive outlook for the equities market amidst strengthening macroeconomic fundamentals – in addition to declining share prices creating attractive re-entry opportunities.
The NGN/USD weakened by 0.14% to NGN360.51 in the I&E FX window, while it remained flat at NGN363 in the parallel market. Total turnover in the I&E FX window fell 2.17% to USD212.85 million, traded within the NGN359-NGN361.50/USD band.
The overnight lending rate was flat, closing at 3.00% once again, amid persisting surplus liquidity.
Proceedings in the NTB market turned bearish, as average yield increased by 8 bps to 11.11%. Selloffs occurred across all ends (short: +12 bps; mid: +5 bps: and long: +6 bps) ends of the curve, with the 57DTM (+74 bps), 120DTM (+46 bps), and 253DTM (+71 bps) bills recording significant expansions.
Bearish sentiments persisted in the bond market, as market players sold off following increased supply at the primary auction. Consequently, average yield inched up by 2 bps to 12.70%. Yield contraction at the mid (-6 bps) and long (-5 bps) ends of the curve were overshadowed by yield expansion at the short (+16 bps) segment.
Notable bonds include the MAR-2027 (-12 bps), JUL-2034 (-14 bps), and JUN-2019 (+26 bps). At today’s primary auction, the DMO allotted NGN38.29 billion of the APR-2023 note (new issue), NGN37.75 billion of the MAR-2025 note (re-opening), and NGN63.96 billion of the FEB-2028 (re-opening) note at respective stop rates of 12.75%, 12.85% (vs. 13.53% at the previous auction), and 12.89% (vs. 13.60% at previous auction).
