Breakfast Report - 28 May, 2018
After hovering just below $80/bbl last week, oil prices opened the week below $75/bbl amid fears that Saudi Arabia and Russia would lead a charge to increase production by as much as 1 million barrels a day in the second half of the year. As the global supply glut looks to have abated, free-falling production in Venezuela and Mexico may cause supply gaps in the medium-term, compelling OPEC to act to rebalance the market. In addition, U.S. rig count increased to its highest point since 2015 at the end of May as the country edged towards 11 million barrels a day and Russia’s crown as the world’s top oil producer. The initial surge in global crude prices had also stoked concerns about a shock to global economic growth which would in turn affect crude oil demand. Overall, it looks like global oil prices are heading towards a near-term equilibrium as the demand and supply picture becomes clearer. We note that OPEC and non-OPEC countries will meet on the 22nd of June to review the current oil output cut and assess whether it should be extended until the end of the year.
Equity: Bears dominated the Nigerian bourse on Friday as the ASI closed both the day (-101bps) and week (-284bps) in the red, the seventh straight session of losses and fourth consecutive w/w decline. We highlight that all key sectors closed lower last week. With bears holding sway at the end of last week and all market indicators persisting negative, we expect sentiment to remain bearish today.
Stock Watch: JAPAULOIL has lost 50% in thirteen consecutive sessions of losses. The stock currently trades at a record low of ₦0.24 and has declined 52% ytd, making it the fifth worst performing stock on the exchange.
Fixed Income: We expect relatively healthy system liquidity to support buying this week, particularly ahead of the ₦300 billion 10.70% FGN MAY 2018 maturity. However, this may be capped by CBN liquidity mop ups. The apex bank will be conducting a T-bills PMA this week, offering ₦86 billion across the 182DTM and 364DTM bills.
Vetiva provides clients with independent and unbiased access to analysis and opinion. We keep our clients on the cutting edge of market information and provide up to date market intelligence on quoted companies. Our services allow brokers, investment firms, and asset managers focus their energies on developing investment strategies and client relationships.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.