The Market Today - 10 January 2018
World Bank revises Nigeria’s 2018 growth expectation
In the World Bank’s newly released Global Economic Prospects, expectation is that the current cyclical recovery in the global economy would continue in 2018, with the World Bank projecting global growth of 3.1% (IMF: 3.7%). Notably, whilst growth in advanced economies is expected to slow slightly, this should be offset by modest growth in emerging markets – from 4.3% in 2017 to 4.5% in 2018. For Sub-Saharan Africa, the World Bank foresees sharper recovery (2017: 2.4%, 2018: 3.2%), supported by firming commodity prices and strengthening domestic demand. The Bank also projects 2018 growth of 2.5% for Nigeria (Vetiva: 2.0%; IMF: 1.9%), driven by improving oil production and prices, reforms in the foreign exchange market and focus on non-oil sectors such as agriculture. This is in line with our broadly positive view of the economy this year, though we highlight latent risks from rebounding inflation and political uncertainty in the latter part of the year.
No bears in sight as market rally continues
The Nigerian equity continued its 2018 bull run with a 129bps gain yesterday. With several market indicators still signaling an upbeat market sentiment, we anticipate further gains in today’s session.
Stock Watch: Following its inclusion in the NSE Oil & Gas Index this year, ETERNA has advanced for six straight sessions –notching 33.25% Ytd. The stock currently trades at a price of N5.41.
Flat trading in FI market amidst no OMO auction
In the absence of OMO announcement yesterday, Interbank Call rate declined 167bps to 16.33%. Mixed trading persisted in the the T-bills marketyesterday with yields trending in opposite directions. Meanwhile, buying sentiment cooled in the bond space though yields on benchmark bonds still declined 3bps on average. We expect trading in the fixed income market to remain mixed amidst relatively constrained liquidity and as traders remain cautious over bond supply in the first quarter of 2018.
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