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The Market Today - 5 April, 2017

President Buhari to launch ERGP today
The Economic Recovery and Growth Plan (ERGP) will be formally launched today by President Buhari. The Plan, which will run through 2017-2020, was made public early last month after The World Bank and AfDB tied concessionary loan agreements on the release of the plan. The objective of the plan is to kick start Nigeria’s economic recovery and accelerate diversification efforts by focusing on infrastructure and the ease of doing business. The government intends to remove the constraint to private sector prosperity and initiate a private sector-led economic development agenda. We note that the plan identifies five key execution priorities – stabilizing the macroeconomic environment, achieving food security, ensuring energy self-sufficiency, improving transportation infrastructure and driving industrialization with a special focus on MSMEs. We consider the plan to be relatively robust and targeted and also highlight the usefulness of the proposed ERGP delivery unit in ensuring accountability and adequate implementation. Nevertheless, we flag sloppy implementation and security challenges as salient risks to the success of the plan.

• Equities close flat in mixed trading session
  The Nigerian bourse closed relatively flat yesterday (NSE ASI down 3bps) amidst mixed trading across key sectors. The diverse sector performances and the relatively balanced market breadth suggest that market sentiment remains mixed. We expect this trend to persist today even as investors continue to react to corporate earnings releases.
• Stock Watch: After touching its lowest price this year, CADBURY has notched 24% in the last ten sessions with 22% coming from consecutive gains in the last four sessions. The stock currently trades at ₦9.45 (year high: ₦10.00) – 8.2% off its year open price.
• Bonds trade bearish amidst release of bond calendar
  Yesterday, the DMO released the Q2’17 bond calendar, showing a planned offer of ₦370billion – ₦460 billion for the quarter (Q1’17 offer: ₦370 billion; eventual sale: ₦535 billion). Also, the DMO will be issuing a new 20-year bond (FGN APR 2037). Amidst the calendar release, the bond market turned bearish with yield upticks recorded across board. Meanwhile, trading in the T-bills market was muted with yields relatively unchanged across most maturities. We expect cautious trading in the T-bills space ahead of today’s Primary Market Auction, where the CBN would be offering a total of c.₦235 billion across the 91DTM, 182DTM and 364DTM bills.