The Nigerian equities market closed higher, with the All Share Index advancing by 1.11% to 25,755.18 points.Today’s positive performance swung the Week-to-Date (+0.94%) return into the green and reduced the Year-to-Date loss to 4.17%.The Industrial Goods (+3.25%) index recorded the largest gain, owing to investors buying into WAPCO (+5.00%) and DANGCEM (+2.17%). Likewise, the Consumer Goods (+0.36%), Oil & Gas (+1.41%), Banking (+0.54%), and Insurance (+0.50%) indices appreciated, following demand for 7UP (+9.40%), MOBIL (+3.66%), GUARANTY (+2.04%), and CONTINSURE (+4.31%) respectively.
Market breadth was positive, with 19 gainers compared to 18 losers. Total volume traded increased by 52.24% to 241.62 million shares, valued at N1.49 billion, and exchanged in 3,339 deals.We expect the market to close the week in the green, as investors continue to take advantage of cheap valuation.
In the currency market,the apex bank announced earlier in the day that it would sell USD100 million in 60-day currency forwards at the interbank market through commercial lenders. Asides that, it was business as usual in the currency market, with the naira — in the interbank space — strengthening by 0.08% against the pound to N398.44, while it weakened by 3.65% against the euro to N337.54. The LCY was flat against the dollar at N306.20. In the parallel market space, the NGN/USD (+0.25%) strengthened to N397.00, while the NGN/EUR (-1.20%) weakened to N420.00. The NGN/GBP was flat at N485.00.
FIXED INCOME AND INTERBANK
In the money market overnight rate expanded by 208bps to 14.58%, from yesterday’s close of 12.50%, following today’s OMO auction, wherein the apex bank offered the 189-DTM (N10.00 billion) and 308-DTM (N20.00 billion) bills, and sold N3.35 billion and N20.91 billion respectively. The increase in rate also mirrored a reported drop in system liquidity to N35.07 billion, from yesterday’s close of N62.20 billion.
Activities in the treasury bills space were mixed, closing with a bearish bias. On average, yield moved northward by 2 bps to 17.41%, following selloffs at the short (+2 bps) and long (+1 bp) ends of the curve. The 4-MAY-17 (+111 bps) and 4-JAN-18 (+7 bps) bills came under the most pressure at both ends. At the long (-1bp) segment of the curve, the 3-AUG-17 (-23 bps) experienced the largest yield contraction. At yesterday’s NTB auction, the apex bank fully allotted N234.89 billion across the 91-DTM (N35.00 billion), 182-DTM (N33.49 billion), and 364-DTM (N166.40 billion) bills. The stop rate on the 91-DTM (13.55% vs. 13.55%) was unchanged from the previous auction, while the stop rate on the 182-DTM (17.21% vs. 17.20%) and 364-DTM (18.74% vs. 18.69%) came in higher than the previous auction. Noteworthy, the 91-DTM, 182-DTM, and 364-DTM bills were oversubscribed by N2.5 billion, N1.2 billion, and N0.37 billion respectively.
Likewise, investors were downbeat in the bond market, with average yield expanding by 12bps to 1.30%. Yields at the short (+49 bps), mid, and long (+1 bp apiece) ends of the curve were pressured, as investors sold-off the APR 2017 (+129 bps), JAN 2022 (+4 bps), and MAR 2036 (+2 bps) maturities respectively.
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