The Market Today - 9 May, 2017
Nigeria
seeks $5.2 billion from World Bank for power sector
According to the Minister of
Power, Works and Housing, Babatunde Raji Fashola, Nigeria is currently in talks
with the World Bank to raise $5.2 billion for the development of the power
sector. The minister also disclosed that disbursements are billed to begin in
June or July this year so as to enable completion of some of the projects by
2018. Given the unique importance of the power sector, a fast traction in the
planned funding and project execution would go a long way in stimulating
economic activities. We also highlight that the release of the Economic
Recovery and Growth Plan (in March) could facilitate the funding discussions.
Nigerian
equity market sustains bullish run
Extending its gaining streak
to 7 sessions, the Nigerian Bourse climbed further at week open with the NSE
ASI up 70bps. With the sustained bullish
bias across most key sectors and broad based buying sentiment, we expect
another positive close for the ASI in today’s session.
Stock
Watch: Lafarge Africa PLC (WAPCO) yesterday announced
intentions to seek shareholders’ approval to raise capital up to a sum of ₦140
billion by way of Rights Issue. The details on timing and price of the Rights
are yet to be communicated. WAPCO currently trades at ₦49.60, up 21% ytd.
Yields
march northwards amidst liquidity pressures
Sentiment in the fixed
income market remained bearish at week open. The bond market was little changed
as yields rose marginally on select maturities. Notably, the yield on the
12.50% FGN JAN 2026 bond rose 2bps to close at 16.13%. Trading was similarly
bearish on bills as liquidity pressure continued to weigh on the market. The
most significant advances were observed on the yields of the 80DTM, 157DTM and
199DTM bills as they rose 48bps, 16bps and 13bps to close at 19.27%, 20.12% and
20.76% respectively. Given the tepid sentiment at the start of the week and
considering the expected Central Bank of Nigeria foreign exchange sale, we
foresee further uptick in yields in today’s session.
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