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Breakfast Report - 19 November, 2018

 

The Week Ahead

Last week, the UK cabinet backed the draft withdrawal agreement written by British and European negotiators. The agreement covers all aspects of UK-EU relations from immigration to agriculture, with a major part of the agreement established to maintain European workers’ rights to live and work in the UK until December 2020, after which the UK would take full control of its borders. The draft deal does not fully uncouple the UK from the EU as many right-wing politicians were hoping, with the UK remaining in the customs union almost indefinitely thanks to a backstop to prevent a hard border between Northern Ireland and the Republic of Ireland. This week, Theresa May will travel to Brussels to iron out the final details of the political declaration on Britain’s future relationship with Europe with the President of the European commission, with an approval expected by Sunday.

Equity: The market ended trading last week on a positive note, gaining 61bps on Friday, but losing 44bps w/w. With weak sentiment continuing to drive tepid activity, we foresee another mixed to negative start to this week’s trading.

Stock Watch: DIAMONDBNK lost for 4 consecutive sessions last week to trade at a 40% loss from its year open price. The stock shed 526bps on Friday to settle at a year-low of ₦0.90.

Fixed Income: Following still-tight market liquidity and tepid investor sentiment last week, we expect trading to remain muted in the fixed income market at week open.