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The Market Today - 28th March 2017

CBN reduces retail FX rate as it pursues FX market parity

At the start of the week, the Central Bank of Nigeria (CBN) revised the rate at which it sells dollars to Deposit Money Banks (DMBs) for invisible retail transactions from NGN370/USD to NGN357/USD. It also capped the rate that DMBs can sell to retail end-users for invisible transactions at NGN360/USD (Previous: NGN375/USD). Also, the apex bank will offer $85 million at today’s foreign exchange (FX) sale for retail transactions and $100 million for wholesale transactions. We highlight this directive as a further step in the CBN’s efforts to close the gap between the official and parallel market rates. In the last month, the naira has appreciated 14% in the parallel market as the CBN has eased access to dollars for retail transactions to alleviate demand pressure on the naira in the parallel market.

NSE ASI opens in the green amidst mixed trading

The Nigerian bourse opened the week on a slightly positive note (NSE ASI: +12bps) as modest gains in the Banking and Consumer Goods sector were trimmed by losses in the Industrials sector.

Stock Watch: CCNN released its FY’16 results with PAT outperforming consensus estimate by 65%. The Board however did not recommend dividend payment for FY’16 against market expectation of ₦0.07/share.

T-bill yields moderate further at week open

Notwithstanding an OMO mop up yesterday, the T-bills market continued bullish with sizable yield moderations across most maturities. Meanwhile, the bond market opened the week to slight sell-offs, likely as a result of profit taking. However, we foresee stronger demand in today’s session as market sentiment remains bullish. Also, we expect the modest bullish trading in T-bills market to continue barring further strains on system liquidity.