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Breakfast Report - 16 September 2019

In an interview with Bloomberg TV, the GMD of the Nigerian National Oil Corporation, Mr. Mele Kyari announced that the corporation has agreed to a $2.5 billion loan facility with a Chinese lender for the construction of a gas pipeline. He further highlighted that the pipeline is expected to supply 2 billion standard cubic feet of gas (equivalent to 3,600 MWs of power). The GMD stated that power distribution will be facilitated through the Kaduna, Kano and Abuja power plants, adding that the additional capacity will increase industrialization in these locations. On the issue of delays in deep offshore projects, Mr. Kyari attributed it to uncertainty in the fiscal environment of the country, along with other concerns from their partners. He added that the firm had resolved some of the impediments by implementing a plan in which the firm has commercial closures with these partners


Equity: With the ASI recording a positive w/w performance of 2.33%, as bellwethers gained over the course of last week, there appears to be an improved level of confidence in the domestic market. However, having exhibited similar trading patterns in the past, the possibility of profit taking activity on gains made last week cannot be overruled.

Stock Watch: AIRTELAFRI advanced 819bps to settle at ₦350.00 at the end of last week's session. At ₦350.00, AIRTELAFRI is currently trading at a 3.79% discount to its listing price (₦363.80). Last week's upward movement represents its second capital appreciation since its debut on NSE.

Fixed Income: Given constrained liquidity coupled with tepid interest on the short-term bills, we expect further yield advances in the secondary T-bills market at the start of the week. Furthermore, we expect further muted activity in the bond space to start the week.