The Market Today - 02 March 2018
Capital Import rises to $12.2 billion in 2017
According to the Nigerian Bureau of Statistics, Q4’17 capital import grew 30% q/q and 248% y/y to $5.4 billion in Q4’17, taking FY’17 numbers to $12.2 billion (FY’16: $5.1 billion). The growth in Q4 was driven by increases across all capital sources. Portfolio investment grew 25% q/q to $3.5 billion amidst continued stability in the FX market. Foreign Direct Investment (FDI) and Other Investment also improved over the quarter, up 222% q/q to $0.4 billion and 21% q/q to $1.5 billion respectively. Stable outlook on currency front would be key for capital import prospects in 2018 even as it provides upside for the country’s return to the JP Morgan bond index. Continued recovery from recession (FY’17 GDP: +0.8%, FY’18: +2.4%) and FG efforts on improving ease of doing business should bode well for market confidence and ultimately FDI. However, heightened political tensions on the 2019 elections and higher global interest rate outlook might prove a dampener in the second half of the year.
Nigerian bourse opens March in the red
The Nigerian bourse opened the month in the red as the NSE ASI dipped 112bps on the day. Near-even market breadth and choppy intraday trading point to mixed, rather than bearish market sentiment. However, with pressure on bellwether stocks, we foresee another down-trending session at week close.
Stock Watch: FIRSTALUM has gained 18% in the last four sessions. The stock currently trades at ₦0.45 and has declined 10% ytd following the lifting of the ₦0.50 price floor.
Mixed trading across the board in FI market
The CBN conducted an OMO auction yesterday, offering ₦400 billion on the 91DTM and 259DTM bills. Whilst no sale was made on the shorter dated bill, the apex bank sold ₦268 billion on the longer dated bill at a stop rate of 14.40% (effective yield: 16.04%). Trading in the T-bills market was mixed with yields trending in opposite directions. Trading was similarly varied in the bond space with yields on benchmark bonds remaining flat on average. Despite yesterday’s ₦109 billion maturity, we note that buying momentum was curtailed by CBN liquidity mop up. Therefore, we foresee another mixed session should the CBN persist with its liquidity mop ups.
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.