- The Nigerian equities market closed higher, with the All Share Index climbing 0.12% to 25,485.17 points.
- Today’s positive performance increased the Month-to-Date gain to 0.62% and reduced the Year-to-Date loss to 5.17%.
- The Banking (+0.14%) and Insurance (+0.15%) indices were bolstered by gains recorded by ZENITHBANK (+0.07%) and AIICO (+3.64%) respectively. Likewise, the Consumer Goods (+0.46%) and Oil & Gas (+0.15%) indices closed in the green, following demand for NB (+0.01%) and OANDO (+0.19%) respectively. On the flip side, profit-taking in WAPCO (-2.71%) weighed on the Industrial Goods (-1.13%) index.
- Market breadth was positive, with 17 gainers, versus 12 losers. Total volume traded increased by 62.27% to 561.48 million shares, valued at N2.47 billion, and exchanged in 3,032 deals.
- Corporate Release: 2016FY earnings: CHAMPION (PAT: +587.57% y/y), CCNN (PAT: +4.39% y/y).
- We expect the equities market to close higher in the session ahead. In a related development the currency transactions continued on the upside as the naira gain more strenghth as a result of the CBN intervention.
- Continuing its forex intervention, the apex bank offered USD 100 million in 60-day currency forward contracts and also sold USD 1.5 million at N306.30/USD in the interbank space. In another development, the Central Bank said that it will start selling dollars to private individuals at N360.00/USD (previously N375.00/USD), in what is expected to further narrow the spread between the interbank and parallel market rates. That said, the LCY – in the interbank market — weakened against the pound (-4.00%) and euro (-3.97%) to N399.94 and N344.34 respectively, while it strengthened against the dollar (+0.07%) to N306.80. In the parallel market, the naira was flat against the dollar, pound and euro at N390.00, N490.00 and N430.00 respectively at the time of writing.
FIXED INCOME AND MONEY MARKET
- The overnight money market rate expanded by 342bps to 13.42%, from its previous close of 10.00%, following today’s OMO auction wherein the CBN sold N43.35 billion across the 199-day (N3.50 billion vs. N10.00 billion offered) and 325-day (N39.85 billion vs. N20.00 billion offered) bills.
- Trading in the NTB market was mixed — albeit closing with a bearish bias — with average yield expanding by 1bp to 17.25%. Yield expansion at the short (+22bps) segment — as investors sold-off the 4-MAY-17 (+89bps) bill — doused snippets of demand at the intermediate (-2bps) and long (-9bps) ends of the curve, wherein the 13-JUL-17 (-26bps) and 16-NOV-17 (-26bps) maturities respectively recorded the largest contraction.
- Investors remained upbeat in the bonds market, with average yield contracting by 23bps to 16.10%. Demand was most notable at the short (-101bps) end of the curve, driven mainly by the APR 2017 (-401bps) maturity. Yield also contracted at the long (-2bps) end and was almost unchanged at the mid (+1bp) end.
featured image is from google image