Equities Market –
Stocks sold-off today as participants booked profit across a wide range of stocks, in line with our expectation that a sort of pull-back is in the offing. The benchmark index plunged by 2.61% to end the session at 33,477.89 points, the biggest one-day loss this year. Today’s drop cut the year-to-date gain to 24.57%.

Sector performance was bearish across board. The industrial index plunged by 3.56%, weighed down by the likes of DANGCEM (-4.19%), WAPCO (-4.06%) and CUTIX (-3.59%). The banking index dropped 2.90% as the market sold-off the likes of SKYEBANK (-5%), ETI (-4.97%), DIAMONDBNK (-4.69%), ZENITHBANK (-3.99%), ACCESS (-3.98%), STANBIC (-2.74%), GUARANTY (-2.53%) and FIDELITYBK (-1.53%). The insurance index shed 1.41% as traders offered the likes of AIICO (-4.69%), NEM (-4.17%), MANSARD (-3.20%) and CONTINSURE (-1.52%). The consumer goods index was down 1.14% with the notable losers being PZ (-5%), CADBURY (-4.98%), DANGFLOUR (-1.90%), NB (-1.19%), NESTLE (-1.10%) and DANGSUGAR (-0.99%). The oil and gas index lost 0.53% as the market offered OANDO (-4.97%).

General market breadth was negative as traders booked profit across a wide range of stocks. The session registered 37 decliners and 12 gainers. The top three losers were PZ (-5%), SKYEBANK (-5%) and CADBURY (-4.98%) while the top three gainers were NEIMETH (9.09%), CONOIL (4.99%) and CCNN (4.93%). Investors traded 508.73 million shares worth ₦6.40 billion.

MSCI has postponed the potential removal of the MSCI Nigeria Index from the MSCI Frontier Market Index to November 2017 to allow for more time for international institutional investors to better assess the effectiveness of new FX trading regime recently introduced by the CBN, especially the I & E window.

Atlas Mara Ltd said on Wednesday that it plans to raise $200 million and increase its stake in Union Bank of Nigeria. It aims to purchase a 13.40% stake from Clermont Group which will push its total stake in the bank to 44.50%.

At this point it will be interesting to see how the market plays out in the remaining two sessions of the week. A continued drop in the index could spark a more aggressive bout of profit-taking but we expect bidders to still take advantage of sizeable dips in the market.

Money Market & Fixed Income –
The banking system opened with a balance of ₦201.81 billion, up from ₦180.54 billion yesterday. The CBN yesterday sold ₦1.32 billion worth of 170-day OMO bills at a yield of 19.65% and ₦10 billion worth of 345-day OMO bills at a yield of 22.57%. The CBN today sold ₦11.32 billion worth of OMO bills. The average inter-bank repo rate plunged by 15.70 percentage points to 16.79%.

Continued OMO sales have kept FGN debt yields elevated for a while and we did see bonds and T-Bill yields rise in today’s session. The average T-Bill yield was up 9bps to 20.02% while the average bond yield added 6bps to 16.73%, driven by sell pressure at the short-end of the yield curve.

The Federal Government on Tuesday announced that it had successfully raised $300 million worth of 5-year diaspora bonds at a coupon of 5.625%—the offer had a bid/cover ratio of 1.30x.

Foreign Currency –
The Naira inched down by 0.02% against the US Dollar at the inter-bank market to ₦305.85/$. The Naira again closed unchanged against the US Dollar at the parallel market and was quoted at ₦368/$. At the I & E window, the Naira lost 1.16% against the US Dollar to ₦365.86/$.