The Market Today - 19 April, 2017
IMF retains Nigeria’s 2017 projected GDP growth at 0.8%
The International Monetary Fund maintained its 2017 GDP growth forecast for Nigeria at 0.8% to be supported by recovery in oil production, expected sustainable growth in agriculture and higher public investment. However, the Chief of IMF’s World Economic Studies reiterated that to achieve stronger and sustainable growth, Nigeria and other commodity exporters will need to diversify their revenue base and adjust to structurally lower commodity revenues as commodity prices remain relatively weak despite the recent modest recovery. Meanwhile, for Sub-Saharan Africa, the IMF estimates 2.6% and 3.5% growth for 2017 and 2018, revised lower from its initial projections of 2.8% and 3.7% for 2017 and 2018 respectively. Notably, Cote d’Ivoire, Senegal and Ghana are expected to record the highest regional growth with GDP growth forecasts of 6.9%, 6.8% and 5.8% respectively for 2017.
Bears hold sway at week open, ASI down 114bps
Coming off the Easter break, the Nigerian equity market opened the week to sell offs as the NSE ASI slid 114bps following negative performances across key sectors. Whilst we expect another bearish performance (noting the broad based selloffs across key stocks), we foresee milder losses in today’s session as investors cherry pick across beaten stocks.
Stock Watch: UNILEVER announced its Q1’17 result after market close yesterday. Profit after Tax outperformed Vetiva estimates and corresponding period in 2016 by 71% and 54% respectively. After a ₦0.10 dividend mark down at week open, the stock currently trades at ₦33.15 – 5.28% off year open price.
Bearish trading persists amidst tight liquidity
Amidst tight system liquidity, bearish trading persisted in the fixed income market. We expect the constrained liquidity to further cap demand across the fixed income space. Also, the CBN would conduct a Primary Market Auction today where ₦168 billion would be offered across the 91DTM, 182DTM and 364DTM bills.
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