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The Market Today - 23rd February 2017

• Nigeria goes a-borrowing, seeks fresh Eurobond approval
• The Acting President has sought the approval of the National Assembly for the issuance of a $500 million Eurobond to fund the 2016 fiscal deficit. We recall that earlier this month, Nigeria issued a 15-year $1 billion Eurobond at 7.875% for the same purpose. Going by the level of interest recorded at the last issue (6.8x oversubscription) and the relatively smaller size on offer this time, we anticipate another successful issue subject to approval by the National Assembly.
• Meanwhile, the Federal Account Allocation Committee distributed ₦465 billion to the three tiers of government in February, 16% higher than the January distribution (₦400 billion). The Permanent Secretary, Ministry of Finance – Mahmoud Dutse attributed the increased payout to a rise in Federation export sales as mineral revenues jumped ₦58 billion to ₦204 billion. He also noted that this came on the back of modest improvement in oil prices and volumes, with the latter due to the reduction in the frequency of militant attacks on oil infrastructure in the Niger delta. We believe the FAAC payout could come in even higher in subsequent months given the sustained modest uptrend in oil prices. However, the force majeure at the Forcados, Qua Iboe and Brass oil export terminals continue to cap oil revenues.
• NSE ASI holds flat amidst mixed sector performances
• The NSE ASI maintained a flat close as sustained gains across select heavyweight Consumer Goods stocks once again offset weak performances across other sectors. Notwithstanding the sustained gains in the Consumer Goods sector, we highlight that the NSE ASI could post steeper losses in the coming session as broad market sentiment remains largely bearish – noting the sustained negative market breadth.
• Stock Watch: WAPCO has come under significant sell pressure since the start of the week. We believe the decline is as a result of investors exiting their positions ahead of its likely downbeat FY'16 earnings release.
• Yields moderate as FAAC inflows boost liquidity
• After a surge on Tuesday, Interbank Call rate fell to 30.8% (prev:128.3%) as system liquidity got a boost from FAAC inflows. Amidst the improved liquidity, the Fixed Income market traded bullish as yields moderated across the space. We expect further yield moderation in the coming session supported by anticipated inflows (₦208 billion) from OMO maturity, barring any mop up by the CBN.