The Market Today - 6 July 2017
FG moves to divest 20% of its shares in privatized companies
According to the Director-General of the Bureau of Public Enterprises (BPE), the Federal Government is undertaking an assessment of some of its partly privatized companies with a view to selling up to 20% of its stake in these companies on the Nigerian Stock Exchange (NSE). Whilst we do not expect the listings to occur immediately, we note that the complete listing of the Federal Government’s equity in these companies is the longer-term goal and the eventual achievement would go a long way to deepen the market.
Moody’s assigns Ba3 credit rating to DANGCEM
Moody Investors Service has assigned DANGCEM a first time credit rating of Ba3, one notch above the sovereign rating. According to Moody’s, the rating upgrade reflects the company’s strong standalone credit profile and track record of demonstrated financial support from its parent company, Dangote Industries Limited.
Bearish sentiment persists on the Nigerian Bourse
The ASI declined further in yesterday’s session albeit posting softer losses (down 33bps - lowest decline in the four consecutive sessions of losses) as sentiment remained downbeat on the Nigerian bourse amidst improved market volumes. We foresee another decline for the ASI today. Given the sizeable volume of stocks on the offer cart at the end of yesterday’s session and the persistently wide negative market breadth.
Stock Watch: Bears have swooped in on NEIMETH with the stock losing 23% in four consecutive sessions. NEIMETH is one of the few stocks posting a negative ytd return (-12%) and currently trades at ₦0.69.
Market trades mixed amidst PMA
In the secondary market, T-bills trading was mixed with yields moderating 13bps on average across the short end but rising at the other end of the space. Similarly, the bond market resumed mixed trading with a bearish bias as yields rose on select maturities but declined marginally on both 20-year tenors. Barring any OMO announcement by the CBN, we expect some improvement in market demand today amidst expected OMO maturity of ₦66 billion.​
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