Weekly Market Wrap - 08 December 2017
Bull-run ends with ASI down 70bps
Despite a negative session at week close (ASI down 70bps), the Nigerian bourse notched an impressive 346bps w/w gain following green closes in the previous four sessions. We highlight mild profit taking in the market at week close following the seven-session bull-run. With key sectors pressured at the end of the session, we anticipate another red close at the start of next week.
Stock Watch: FIDELITYBK has gained 57% over the last twelve sessions. The stock currently trades at a year-high of ₦2.49, above consensus target price of ₦1.60, and has returned 196% ytd.
Positive sentiment continues to dominate F.I market
Whilst the fixed income market started the week on a mixed note, bullish sentiment quickly surfaced on Tuesday in the absence of an OMO auction from the Central Bank of Nigeria. As the week proceeded, buying interest further strengthen across the market further supported by a ₦90 billion OMO maturity on Thursday and the sustained hold-off on OMO auctions by the CBN throughout the week (first time since January this year). With expectations of lower supply and interest rates going forward, we believe demand will remain healthy in the fixed income market in the coming weeks as market participants continue to lock in comparatively higher rates, even as buying interest is further supported by stronger system liquidity (amidst the CBN’s current stance to pause OMO auctions). Furthermore, we foresee healthy demand at next week’s Primary Market Bond Auction where the Debt Management Office will be offering a total of ₦100 billion across the 5-year and 10-year bonds.
On the currency front, the CBN continued its interventions, injecting another c.$210 million across various windows of the inter-bank foreign exchange market. We expect stable liquidity flow, as the CBN continues to inject foreign currency into the system, to continue to support the currency. However, we note that further strengthening in system liquidity could spur modest demand pressure.
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.