The Market Today - 8th March 2017
FG releases Economic Recovery and Growth Plan
The Ministry of Budget & National Planning yesterday released the much anticipated Economic Recovery & Growth Plan (ERGP) which will serve as a Medium Term framework to restore Nigeria to economic growth. The ERGP will run through 2017-2020 and identifies five key top priorities; Macroeconomic Stability, Agriculture and food security, Energy (power and petroleum product sufficiency), Transportation Infrastructure, and Industrialization focusing on Small and Medium Scale Enterprises. Notable initiatives, specifically within the all-important energy space include ramping up oil production to 2.5mbpd by 2020, privatizing selected public enterprises/assets, and revamping local refineries to reduce petroleum product imports by 60% by 2018. Whilst the ERGP appears good on paper, we highlight that the poor implementation of previous economic plans could cap market confidence and optimism on the ERGP. We also highlight that Nigeria’s proposal for $1 billion World Bank facility and the release of the second tranche ($400 million) of its $1 billion loan from African Development Bank are hinged on the submission of the ERGP.
Blue chip stocks send NSE ASI soaring
Yesterday, the Nigerian bourse bounced back from prior losses to record its strongest close in 2017 so far (NSE ASI up 223bps) amidst firm investor appetite across blue chip stocks. We expect the NSE ASI to continue higher at mid-week supported by sustained interest across bellwether stocks.
Stock Watch: DANGCEM rebounded from a 52-week low yesterday, gaining 492bps to close at ₦156.61. Despite the rebound, DANGCEM still trades 10% off its 2017 high. With the stock trading at 10.9x FY’17 P/E - a discount to its 5-year historic average of 17.1x, we believe the stock could clinch more points in coming sessions on the back of bargain hunting by investors.
Yields little changed in muted trading
The Fixed Income market traded relatively flat on Tuesday as investors continue to tread waters in anticipation of FX sale by the CBN. We expect demand in the fixed income market to remain capped as market participants continue on the sidelines in anticipation of further FX sale by the apex bank.
Vetiva provides clients with independent and unbiased access to analysis and opinion. We keep our clients on the cutting edge of market information and provide up to date market intelligence on quoted companies. Our services allow brokers, investment firms, and asset managers focus their energies on developing investment strategies and client relationships.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.