EUR 45.60 For Business Accounts Only

Breakfast Report - 27 February 2017

• The Acting President sought the approval of the National Assembly for the issuance of a $500 million Eurobond to fund the 2016 fiscal deficit. We recall that earlier this month, Nigeria issued a 15-year $1 billion Eurobond at 7.875% for the same purpose. Going by the level of interest recorded at the last issue (6.8x oversubscription) and the relatively smaller size on offer this time, we anticipate another successful issue subject to approval by the National Assembly.
• Driven by the 60-day national action plan to improve the ease of doing business in Nigeria, the Nigerian Immigration Service (NIS) has amended visa rules to encourage tourism and business activity in the country. Chief amongst these changes is the introduction of “Visa on Arrival” for frequently travelled High Net Worth Investors and Intending Visitors unable to obtain a relevant visa in time for their travel. Such visas would be issued at the port of entry. Meanwhile, the NIS also altered the passport re-issuance procedure so that Nigerians are no longer required to go to the Abuja center for re-issuance. The newly decentralized process means that Nigerians requesting passport re-issuance for the cases of change of name or lost & stolen passports can now do so in their domicile state.
• The Nigerian bourse traded mixed last week as investors displayed varied sentiments across key sectors. Notably, after recording a single w/w gain since the start of the year, the Consumer Goods sector notched a 408bps w/w last week, particularly driven by bargain hunting in GUINNESS and a four-day bull run in heavily weighted NB - following a ₦2.58/share proposed final dividend. However, the sector lost steam at week close as investors took profit in NB amidst sustained losses in UNILEVER and VITAFOAM. Meanwhile, other key sectors closed the week in negative territory. Overall, the NSE ASI notched a w/w gain of 34bps, cutting its ytd loss to 604bps.
• We expect this week’s trading to be dictated by investors’ reaction to corporate earnings as the earnings season gets fully underway.
• Stock Watch: NESTLE is currently trading at an over-6 year low (₦570.00). We expect currency weakness observed in 2016 to pressure FY’16 earnings and highlight that this may put pressure on NESTLE’s usual dividend payout of c.₦30.00.