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Breakfast Report - 26 April 2021

According to news reports, the Senate recently approved fresh loans of $1.5 billion and €995 million, to be obtained from the World Bank and the Export-Import Bank of Brazil, respectively. While the $1.5 billion loan is requested to fund nationwide infrastructural development, the €995 million was approved to finance the Green Imperative Project, which is aimed at developing agricultural mechanization across rural areas in the country. While we believe obtaining capital-tied loans is a step in the right direction, social resistance to energy reforms may delay multilateral funding. Nonetheless, given Nigeria's high debt service-to-revenue ratio, capital projects with high multiplier effects should be prioritized.

Equity: We expect this week to continue the current trend, as more companies continue to release Q1 results. We do foresee some selloffs on a few banking and consumer names, amid less than stellar financial performances.

Stock Watch: STANBIC released their Q1’21 result after market close on Friday, reporting 10% and 19% declines in Top-line and bottom Line respectively. The counter gained 8.70% in Friday’s session, closing at ₦50.00. The stock has gained 13.51% YTD, outperforming the sector which has lost 8.51% YTD.

Fixed Income: We expect to see the market open this week in a bearish manner, as bond investors continue to react to the latest auctions. Meanwhile, we expect to see tepid trading across the NTB and OMO space, as investors continue to monitor developments across the fixed income space and economy.