EUR 45.24 For Business Accounts Only

Breakfast Report - 13 February 2017

• Nigeria successfully issued the long awaited $1 billion 15-year Eurobond, priced at 7.875% (lower than the earlier speculated range of 8.0% - 8.5%). The order book shows that the issue was significantly oversubscribed (7.8x) as foreign investors shrugged off persistent concerns around currency controls and uncertainty over oil production owing to militant attacks in the Niger Delta. We highlight that the issue represents Nigeria’s third and longest maturity Eurobond issuance following the two 10-year bonds issued in 2011 and 2013.
• The Federal Ministry of Budget and Planning estimates that the Nigerian economy shrank by 1.54% in 2016, in line with Vetiva estimate of -1.52% (IMF estimate: -1.75%). The Ministry pointed to both internal and external pressures in explaining the poor economic performance in the last year, and highlighted the Economic Recovery and Growth Plan (ERGP) for 2017-2020 as key to reversing the economic fortunes of the nation. The ERGP, which contains 59 strategies to propel Nigeria’s economic growth, is expected to be released later this month.
• The equity market traded bearish last week as weak investor appetite continued to spur sell-offs across board. After trading lower for the first two sessions, mostly pressured by declines across Consumer Goods stocks, the market however inched higher at mid-week, spurred by advances across select bellwether stocks. Whilst quickly giving up gains in the subsequent session, the NSE ASI however traded slightly in the green at week close as advances across key sectors were trimmed by sustained weakness in Consumer Goods heavyweight – NB. Overall, the NSE ASI lost 179bps w/w, stretching ytd loss to 5.71%. Meanwhile, Jaiz Bank PLC got listed on the stock exchange by Introduction. The Bank listed 29.46 billion ordinary shares at ₦1.25, translating into a start-off market capitalization of ₦36.83 billion.
• Whilst the green closes across most key sectors coupled with the big turnaround in market breadth at last week’s close signal some improvement in overall market sentiment, we highlight that investor appeal for consumer goods stocks in particular remain weak. We believe this could further cap gains in coming sessions.