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Weekly Market Wrap - 07 July 2017

Bears spur slow start to Q3’17
The Nigerian bourse rebounded from its downtrend earlier in the week with the NSE ASI up 32bps today, though the ASI shed 199bps w/w with key sectors closing the week mixed. With market breadth turning positive today albeit amidst relatively weaker volume and value traded, we expect the market to trade higher at week open.

Stock Watch: Following its removal from the NSE 30 Index last week, CONOIL lost 19% this trading week. The stock currently trades at ₦36.31 and has returned -3.12% ytd.
Market sustains mixed trading amidst liquidity constraints

The T-bills market opened the week mixed as tight system liquidity – following a series of OMO auctions – capped demand in the space. Whilst this mixed trading pattern persisted till week close, the market tilted towards a more bullish bias with demand for short dated maturities supported by inflows from a ₦66 billion OMO maturity on Thursday. Trading in the bond space maintained a tepid pace through the week with yields closing flat on average across the space. With the CBN expected to continue its OMO interventions in the coming week, we foresee more mixed trading in the T-bills space with a bearish bias as tight liquidity continues to weigh on the market. We however expect the OMO maturity of ₦90 billion at next week’s close to improve buying sentiment in the space. Whilst we expect tepid trading to persist in the bond space, we believe trading on the auction bonds (5-year, 10-year and 20-year) would be guided by anticipation the monthly bond auction scheduled for Wednesday.

"In the currency market, the CBN continued to improve FX liquidity through consistent interventions through the week. The most notable this week was a $195 million sale on Monday across the different currency windows. We expect the CBN to continue intervening in the currency market to further improve liquidity and prop up the naira.