TUE APRIL 24 2018-theG&BJournal-The domestic bourse opened the week Monday (23/04/18) on a negative note, with the All Share Index dropping by 0.12% to 40,763.93 points, following selloffs of Industrial Goods stocks. Accordingly, the Month-to-Date and Year-to-Date returns moderated to -1.78% and 6.59% respectively.
The Industrial Goods (-2.72%) index posted the largest loss, owing to selloffs of FLOURMILL (-4.69%), WAPCO (-1.91%), and DANGCEM (-0.60%). We attribute WAPCO’s selloff to the disappointing Q1-18 result released by the cement producer early this morning, wherein a decline in revenue of 0.8% y/y and loss after tax of NGN2.00 billion was reported. The Banking (-0.58%) and Insurance (-0.45%) indices also recorded negative returns, as investors liquidated holdings in GUARANTY (-2.12%) and CONTINSURE (-5.14%) respectively. Meanwhile, interests in GLAXOSMITH (+5.61%) and FO (+4.94%) stocks led to gains in the Consumer Goods (+0.90%) and Oil & Gas (+0.56%) indices respectively.
Market breadth remained negative, with 23 losers and 19 gainers, led by CONTINSURE (-5.14%) and LEARNAFRICA (+9.17%). Total volume of trades surged 118.84% to 530.22 million units, valued at NGN7.77 billion, and exchanged in 4, 567 deals.
Despite continued selloffs, we reiterate our positive outlook for the equities market, as relatively lower share prices, as well as still-positive macroeconomic fundamentals, suggests legroom for gains still exist.
The USD/NGN remained flat at NGN363 in the parallel market, while it weakened by 0.03% to NGN360.54 in the I&E FX window. Total turnover in the I&E FX window rose by 66.23% to USD223.79 million, traded within the NGN327.00 – NGN361.50/USD band.
The overnight lending rate dropped by 50 bps to 3.25%, against Friday’s close of 3.75%, amidst the absence of OMO auction to mop-up surplus liquidity in the system.
Average yield contracted by 33 bps to 14.52% in the NTB market, on the back of buoyant liquidity. High demand for the 66DTM (-49 bps), 944DTM (-323 bps), and 283DTM (-291 bps) bills caused contractions at the short (-6 bps), mid (-44 bps), and long (-47 bps) ends of the curve, respectively.
Similarly, activities were bullish in the bond market, as average yield declined by 7 bps to 12.60%. Yields fell across the short (-9 bps), mid (-6 bps), and long (-7 bps) ends of the curve, driven by demand for the JUN-2019 (-19 bps), MAR-2024 (-11 bps), and JUL-2034 (-14 bps) bonds, respectively.
