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The Market Today - 30th March 2017

Nigeria issues $500 million Eurobond at 7.5%
Following Senate approval last week, Nigeria issued the $500 million 15-year Eurobond on Wednesday - priced at 7.5%. We recall that the earlier $1 billion 15-year Eurobond issued in February was priced at a slightly higher yield of 7.875%; this indicates improved investor appetite for the country’s debt issues. The new issue will be consolidated to form a single series with the existing $1 billion Eurobond, all maturing on February 16, 2032. We understand that the inflow from the Eurobond issues is earmarked to fund the 2016 deficit. More so, with a staggering ₦7.3 trillion budgeted expenditure and a deficit of ₦2.63 trillion for the 2017 fiscal year, the FG plans to finance 46% of projected borrowings from external sources. We note that the $1 billion World Bank loan, the second tranche ($400m) of the AfdB $1 billion loan and the $300 million Diaspora bond are well underway.

Blue chip losses drive ASI lower
The Nigerian bourse slipped further into the red as the NSE ASI, pressured by losses across key sectors, dipped 55bps. Given the sustained varied sentiment across board, we foresee another mixed trading session amidst continued reaction to corporate earnings announcement.

Stock Watch: The 462bps dip in yesterday’s session saw LIVESTOCK decline to a new 6-year low, closing at ₦0.62. The stock has lost 13% in the three sessions since releasing its FY’16 results (YTD: 26%).

Fixed Income yields drag amidst mixed trading
Mixed trading persisted in the Fixed Income market at mid-week albeit with a slight bearish bias as sell pressure remained on the short-mid end of the T-bills market. We foresee cautious trading in today’s session as investors await the release of Q2’17 Bond calendar.