The Market Today - 27 April, 2017
FG seeks senate approval for $6.93 billion loan
The Federal Government of Nigeria is currently seeking senate approval to borrow $6.93 billion from the Exim Bank of China ($5.85 billion) and the World Bank ($1.08 billion). The loans are part of the Federal Government’s 2016-2018 external borrowing plans, and would be used to fund the Lagos-Kano railway rehabilitation project, as well as execute a number of social programs in the North-East and other parts of the country. We highlight that the move aligns with the FG’s plans of closing the huge infrastructural deficit through greater use of private and international counterparty funding. This is understandable considering the significant infrastructure gap in the country and the fact that FG revenues remain below historic levels.
DANGCEM singlehandedly drags ASI, down 77bps
The Nigerian bourse closed in the red at mid-week after a decline in market heavyweight DANGCEM singlehandedly dragged the NSE ASI lower (down 77bps), clouding an otherwise positive trading session. We however foresee a rebound in today’s session as investors maintain a strong appetite across key counters.
Stock Watch: GUARANTY announced Q1’17 results yesterday (after market close) with PAT coming in at ₦41 billion, 62% higher y/y and 29% ahead of Bloomberg estimates. The stock currently trades at ₦26.05 having gained 5% over the last three sessions.
GUINNESS also announced its 9M’17 results, although bottom line came in negative at ₦2.56 billion, we highlight that it was significantly better than Bloomberg consensus of a ₦4.97 billion loss. The stock currently trades at ₦60.00 and has been flat for nine straight sessions.
Market trades mixed as players gear up for maturity
Buying interest waned in the bond space amidst a relatively mixed trading session. However, the bills market sustained the bullish trading pattern that has characterized this week with yields moderating across the space. With a ₦480 billion bond maturity expected today, we anticipate increased activity and strong buying interest across the fixed income market.
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