Bears resurface on equities at Nigerian Stock Exchange Tuesday, February, 27, 2018
EQUITIES
The bears resurfaced in the equities market, with the ASI closing lower by 0.66% to 42,299.56 points, following profit taking in major stocks.
Accordingly, the Month-to-Date and Year-to-Date returns moderated to -4.61% and 10.61% respectively.
The Banking index recorded the largest loss, while the Industrial Goods and Consumer Goods (-0.15%) indices followed suit, as investors booked profit in the shares of DANGCEM (-0.77%), GUARANTY (-0.71%), and INTBREW (-4.76%) respectively. Meanwhile, the Oil & Gas and Insurance indices closed positive, driven by interests in TOTAL (+6.91%) and NEM (+4.71%) stocks respectively.
Market breadth remained negative, with 37 losers and 18 gainers, led by AFRIPRUD (-9.44%) and UNITYBNK (+9.82%). Total volume of trades increased by 1.3.98% to 438.65 million units, valued at NGN8.80 billion, and exchanged in 5,339 deals.
Despite selloffs in today’s session, our theme on the equities market remains positive, amid strengthening macroeconomic fundamentals.
CURRENCY
The naira strengthened against the dollar by 0.02% to NGN360.15 in the I&E FX window, while it closed flat at NGN363 in the parallel market. Total turnover in the I&E FX window was higher by 31.08% to USD204.32 million, with trades within the range of NGN358.00 and NGN361.30. Meanwhile, the CBN sustained intervention in the FX market, injecting USD500,000 today.
FIXED INCOME AND MONEY MARKET
The overnight lending rate dropped further by 327 bps to 5.57%, as a result of increased market liquidity (+57% to N202.06 billion). The CBN conducted an OMO auction to mop up excess liquidity, selling a total of N249.68 billion of the 254-day bill. N250 billion of the 93D billion was also offered. However, there were no sales.
Sentiments turned bearish in the NTB market, with average yield inching higher by 6 bps to 14.21%. Selloffs of the 9DTM (+86 bps), 114DTM (+20 bps), and 184DTM (+24 bps) bills caused yield expansion at the short (+15 bps), mid (+8 bps), and long (+2 bps) ends of the curve respectively. At the NTB auction scheduled for tomorrow, the CBN will offer N259.98 billion – N7.89 billion of the 91-day, N30.00 billion of the 182-day, and N22.08 billion of the 364-day – worth of bills to investors.
Proceedings remained bearish in the bond market, as average yield rose marginally by less than 1 bp to 13.68%. There were yield expansions at the long (+1 bp) end of the curve, driven by selloffs of the JUL-2034 (+ 4bps) note, while yields at the short and medium segments were flat.
