The Market Today - 31 May, 2017
​Acting President signs laws to facilitate MSME credit access
The Acting President assented to two bills aimed at enabling easier MSME access to credit facilities in the country. The bills are the Secured Transactions in Movable Assets Act and the Credit Reporting Act, both of which now entrench previous Central Bank of Nigeria (CBN) guidelines in legislature. The Secured Transactions in Movable Assets Act will permit MSMEs to register movable assets (e.g. motor vehicles and equipment) in the National Collateral Registry for use as loan collateral. Meanwhile, the Credit Reporting Act provides for consistent information sharing between credit bureaus and other institutions that provide services on credit, to develop a more comprehensive and reliable credit history for each institution. We consider this a positive development as MSMEs are pivotal in Nigeria’s economy, accounting for about half of national income and over 80% of total employment. Despite this, access to credit has been a struggle for many years, leading the Federal Government to set up a range of development finance institutions, including the recently established Development Bank of Nigeria. We expect this to further improve the ease of doing business in Nigeria.
ASI extends run at week open, up 74bps
With all key sectors (save for the Oil & Gas sector) closing in the green, the Nigerian equity market closed higher (NSE ASI: up 74bps), extending gains to five sessions. We highlight the dip in buying sentiment towards market close as an indication of emerging profit taking activity and foresee a continuation of this in today’s session.
Stock Watch: After advancing 798bps yesterday, FBNH stretched its gaining streak to ten sessions, rising 39% over the period. The stock currently trades at an over one-year high of ₦5.28 and has returned 58% ytd.
Market sustains bullish momentum at week open
Supported by last week’s maturities, demand remained healthy in the bond market with yields moderating at the mid to long end of the curve. Similarly, the bills market sustained bullish trading from last week’s close as yields declined 22bps on average. We expect the system liquidity to further support buying interest in the fixed income space – particularly in the bills market.
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