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Weekly Market Wrap - 09 March 2018

NSE ASI closes in the green w/w after mixed session                                                    

The Nigerian bourse added 18bps at the close of today’s session following mixed closes across key sectors, taking the week’s return to +68bps. In the coming week, whilst we expect general market sentiment to remain mixed, we believe invetsors will continue to keep an eye on corporate earnings as they trickle in.                                                  

Stock Watch: After news that U.S. based private equity firm Milost Global Inc. will be investing in JAPAULOIL, the stock has appreciated for thirteen consecutive sessions. JAPAULOIL was the highest gainer for the week (+54% w/w), for the second week running, closing at ₦0.97. The stock has returned 94% so far this year.                                               

Liquidity tighten constrains yield movement                                                    

Trading in the fixed income market was largely varied for most of the week as tight system liquidity capped buying activities. The CBN sold ₦306 billion worth of bills at OMO auctions through the week, offsetting the impact of the ₦153 billion maturity on Thursday. Activiites however improved at week close with a handful of traded securities recording marginal declines in yields.We anticipate further mixed trading in the coming week as system liquidity remains tight. Also, the CBN would be offering ₦191 billion at the T-bills Primary Market Auction next Wednesday.                                                                 

On the currency front, the CBN sustained its consistent interventions, notably selling $210 million on Monday across different windows. Over the week, the naira depreciated ₦0.23 and ₦0.50 at the I&E FX Window and in the parallel market to close at ₦360.32 and ₦361.00 respectively w/w. We expect rates to continue to trade around the same levels as the CBN continues to inject foreign currency into the system.