FREE

Breakfast Report - 27 May, 2019

Ahead of the Presidential inauguration ceremony scheduled for May 29, President Muhammadu Buhari is expected to sign the 2019 Appropriation Bill into law today. Media reports have also stated that after the signing today, details of the budget would be formally revealed to the public on Tuesday May 28, 2019 by the Minster of Budget and National Planning, Senator Udo Udoma. While the Presidency had proposed and presented an ₦8.83 trillion budget to the National Assembly on the December 18 2018, the legislature upon review, increased the budget size to ₦8.91 trillion, eventually passing the bill on April 30, 2019. Major assumptions in the budget include a 2.3 million barrel per day oil production, an oil price benchmark of $60 per barrel and an exchange rate of ₦305/$.

Equity: With both DANGCEM and the recent market catalyst (MTNN) closing under on Friday, the index returned to the red at week close. We expect a bearish start to the trading week driven by negative sentiment and profit taking around MTNN. Notably, the recently listed company released a notice on the NSE on Saturday stating that it is under investigation by the Economic and Financial Crimes Commission (EFCC).

Stock Watch: After trading at a premium as high as 77% to its listing price of N90.00, MTNN recorded its first negative close on Friday. The telecoms stock shed 604bps to settle at N140.00. The stock has gained 55% since listing on 16 May 2019.

Fixed Income: The CBN is scheduled to hold a PMA on Wednesday, with ₦67 billion on offer. Given the trend observed in T-bill yields last week, we expect sentiment to be mixed, as system liquidity remains tight. Meanwhile, we foresee a quiet start to trading in the bond space, with investor interest on longer-term bonds likely to persist.