THUR, MARCH 22 2018-theG&BJournal-The bulls resurfaced in the domestic bourse, halting a six-day losing streak, as the ASI inched higher by 0.33% to 41,633.79 points, following demands across major sectors.
Accordingly, the Year-to-Date gain increased (albeit marginally) to 8.87%, while the Month-to-Date loss moderated to 3.92%. All sector indices closed in the green, led by the Insurance (+1.61%) index, followed by the Oil & Gas (+0.57%), Banking (+0.53%), Industrial Goods (+0.46%), and Consumer Goods (+0.46%) indices. That was driven by demands for MANSARD (+2.00%), MOBIL (+4.37%), GUARANTY (+0.67%), WAPCO (+0.96%), and CADBURY shares.
Market breadth turned positive for the first time since March 9th, with 29 gainers and 27 losers, led by GLAXOSMITH (+10.20%) and MULTIVERSE (-8.70%). Total volume and value of trades increased by 10.92% and 30.20% to 542.35 million units and NGN7.35 billion, respectively, with a total of 5,039 deals.
Our outlook for the equities market remains positive, as strengthening macroeconomic fundamentals suggest legroom for gains exist; more so, as investors are likely to hunt bargains, following the softening of stocks prices.
The naira remained flat against the USD at NGN362 in the parallel market, while it strengthened by 0.05% to NGN360.12 in the I&E FX window. Total turnover in the I&E FX window increased 2.1x to USD348.64 million, traded within the NGN355-NGN361/USD band.
The overnight lending rate crashed to 8.08%, representing a 1,400 bps decline. That was driven by inflows from maturing OMO (NGN151.15 billion) and treasury (NGN107.91 billion) bills.
Sentiments were bullish in the NTB secondary market, as average yield fell by 2 bps to 14.84%. High demand for the 28DTM (-60 bps) and 301DTM (-25 bps) bills led to yield contraction at the short (-1 bp) and long (-4 bps) ends of the curve, respectively. Yields at the mid segment were flat.
In the bond market, there was a reversal in the bullish trend, as average yield inched upwards by 3 bps to 13.48%. Yields expanded at the short (+3 bps), mid (+3 bps), and long (+2 bps) ends of the curve, owing to selloffs of the JUL-2021 (+12 bps), JAN-2026 (+7 bps) and MAR- 2036 (+5 bps) bonds, respectively. Analysis is provided by CORDROS Capital