EQUITIES
The equities market started the week on a negative note, as the ASI closed lower by 0.26% to 43,056.51 points –as investors booked profit in banking stocks.
Accordingly, the Month-to-Date loss increased to 0.63% while the Year-to-Date gain moderated to 12.59%.
Among the sectors, the Banking (-2.45%) index recorded the largest loss, followed by the Consumer Goods (-0.03) index, owing to profit-taking in GUARANTY (-0.50%) and NESTLE (-0.07%) shares respectively. On the flip side, the Insurance (+0.80%) and Oil & Gas (+0.28%) indices recorded losses, following demands for the shares of MANSARD (+2.66%) and TOTAL (+1.69%). The Industrial Goods index closed flat.
Market breadth was negative, with 33 losers and 19 gainers, led by REGALINS (-5.71%) and UNIC (+9.52%). Total volume of trades decreased by 45.90% to 831.39 million, valued at NGN10.57 billion, and exchanged in 5,651 deals.
Corporate Earnings: FY-2017; ZENITHBANK (PAT: NGN177.93 billion vs. NGN129.65 billion).
Our outlook for the equities market remains positive, anchored on strengthening macroeconomic fundamentals and positive expectation forQ4-17 corporate earnings – which have started trickling in.
CURRENCY
The naira remained flat against the USD at NGN362 for the sixth consecutive session in the parallel market, while it strengthened by 0.04% to NGN360.47 in the I&E FX window. Total turnover in the I&E FX window surged by 135.27% to USD201.21 million. Meanwhile, on Friday, the CBN injected USD335.43 million into the Retail Secondary Market Intervention Sales (SMIS).
FIXED INCOME AND MONEY MARKET
The overnight lending rate expanded by 550 bps to 13.42%, as the CBN mopped up excess liquidity via OMO auction. It sold a total of NGN51.00billion of the 87DTM bill at 12.60%, and NGN88.82 billion of the 227DTM bill at 14.40%.
Sentiments in the treasury bills space were positive, as yields declined 7bps on average, to 14.98%. Yields contracted at all ends — short (-2 bps), mid (-11 bps), and long (-11bps)— of the curve, driven by demand for the 38DTM (-77 bps), 143DTM (-64 bps), and 325DTM (-57 bps) bills, respectively.
Similarly, activities were bullish in the bond market, as average yield fell5 bps to 13.62%. Yields declined at the short (-9 bps) and mid (-4 bps) ends of the curve, but flat at the long segment. Notable bonds include the JUL-2021 (-22 bps) and MAR-2024 (-5 bps).
