The Market Today - 23 March 2018
Acquisition of 9mobile nears completion
Teleology Holdings Limited, the preferred bidder for 9mobile, has confirmed payment of a non-refundable $50milllion to the trustee for the bank syndicate presently holding ownership of 9mobile. The company has also signed a Share Purchase Agreement and other contractual documents with the relevant stakeholders of the deal, and is now expected to pay a balance of $500m within 90 days to finalize the acquisition. The progress in the deal bodes well for consortium of banks to which 9mobile is currently indebted and we expect negotiations on debt restructuring to pick pace.
All-Share Index snaps losing streak
The Nigerian Stock Exchange snapped its six-session losing streak with all key sectors closing in the green and ASI up 33bps. With green closes across all key sectors and steady uptrend in intraday trading, market indicators point to a recovery in market sentiment. We believe trading sentiment will continue to improve at week close, albeit with the ASI ending the week with a negative w/w return.
Stock Watch: ETI released its FY’17 results, with top and bottom line coming in at ₦764 billion and ₦70 billion, up 15% and 233% y/y respectively. The stock currently trades at ₦17.95 and has returned 6% ytd.
Mixed trading session in the absence of OMO mop-up
With the Central Bank of Nigeria refraining from conducting an OMO auction, Interbank Call rate declined to 6.83% (previous: 20.00%) in yesterday’s session with system liquidity supported by an ₦151 billion OMO auction. Whilst we had expected a more upbeat trading session, sentiment in the T-bills market was majorly mixed with yields declining 2bps on average. Meanwhile trading in the bond market turned bearish as yields on benchmark bonds advanced 3bps on average. We see higher chances of an OMO auction from the CBN in today’s session given the improved liquidity position (System liquidity: ₦323 billion). As such, we foresee a more bearish trading pattern in the T-bills space, meanwhile we foresee tepid sentiment for bonds at week close.
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