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Breakfast Report - 9 July, 2018

According to news sources, Dangote Group may look to float its oil refinery arm on the exchange once it comes online (estimated date: 2019/2020). We recall that the Dangote Group is currently constructing a 650,000 barrels a day refinery in a free trade zone in Lekki, a facility that would be able to satisfy Nigeria’s petroleum demand and export excess output to neighboring countries. The move to list the refinery would be a further boon to the Nigerian Stock Exchange as it is likely to be a sizable asset, and would help deepen the market. We note that the primary market of the Nigerian Stock Exchange is getting a new lease of life in 2018, helped by the imminent listing of MTN Nigeria, and the listing of the Dangote refinery company would complement this story.                                                                                                   

Equity: Bears returned to the bourse on Friday after a glimmer of hope in Thursday's session, with the ASI closing 31bps under (-171bps w/w). With market sentiment staying negative at the close of last week after a week of bearish trading, we expect the tepid sentiment to filter into the market today.                                                                                                                                                                                                                                                                                              

Stock Watch: PRESTIGE has shed 21% over the last ten sessions, including 545bps on Friday. The stock currently trades at a price of ₦0.52 and has returned 4% YTD, below the insurance sector’s 9% YTD performance.                                                                              

Fixed Income: Barring any significant OMO mop up this week, we expect buy sentiment to persist in the fixed income market, with most of the demand weighted towards the T-bills space.