The Market Today - 28 April, 2017
​Oil slips as Libya reopens oil fields
Libya’s key oil fields, Sharara and El Feel (combined 400,000 bpd capacity), resumed production on Wednesday after a force majeure on its western port of Zawiya was lifted. Already lower at the start of the week on the back of higher than expected U.S. stockpiles, oil prices fell further yesterday following the Libya announcement. Since then, prices have recovered to mid-week levels amidst stronger hopes that the OPEC oil production agreement will be extended. We recall that the output cut agreed from January is due to expire at the end of June. OPEC and participating non-OPEC partners however remain open to the possibility of extending the deal for a further six months. We highlight that a positive outcome of the deal extension would continue to provide support to oil prices, and further buoy Nigeria’s fiscal position.
NSE ASI rebounds amidst earnings downpour
The Nigerian bourse rebounded from the loss at mid-week (NSE ASI up 52bps) amidst market reaction to a flurry of mostly positive earnings announcements, particularly from banking names. We believe the ASI will wrap up the week with more gains as investors react further to the better-than-expected earnings particularly from the banking names.
Stock Watch: FBNH announced both FY’16 and Q1’17 results yesterday. Whilst FY’16 PAT came in 60% behind Vetiva estimate, Q1’17 came in 10% ahead. Also, the Board of Directors declared full year dividend of 20kobo/share (FY’15: 10kobo/share). The stock trades at ₦3.50 and has notched 4.48% ytd.
Bears steer bond market amidst delayed maturity inflow
Amidst a bill maturity, trading turned bullish in the T-bills space with yields moderating across the curve. In contrast, the bond market was broadly bearish despite the expected bond maturity. We understand that the technical issues surrounding the bond maturity are expected to be resolved today. As such, we believe the imminent improvement in market liquidity will buoy sentiment in the bond market.
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