Weekly Market Wrap - 11 May 2018
Market snaps losing streak at week close
Despite closing out the week on a positive note (ASI up 26bps today), the NSE posted a 48bps w/w decline amidst earlier weightier declines. Though the market swung into positive territory at week close, we believe the underlying mixed sentiment in the market will continue to drive a sideways trading pattern on the exchange in the coming week.
Stock Watch: DIAMONDBNK has shed 10% over the last five sessions. The stock was one of the biggest losers for the week (-9.95% w/w). They released Q1’18 results today reporting ₦48 billion (-2% y/y) in Revenue and ₦785 million (-82% y/y) PAT. The stock currently trades at a price of ₦1.90 and has returned 27% ytd.
Bearish session rounds up a week of selling
Sentiment this week was largely bearish as yields advanced 187bps on average w/w in the T-bills space and 30bps on average w/w on benchmark bonds. Sell pressure was particularly pronounced on T-bills at week close with yields rising 101bps on average. Trading in the bond market was similarly negative as yields on benchmark bonds advanced 12bps on average today. Following the heavy sell offs at the end of the week, there were some signs of market recovery towards the end of the session. In the absence of an OMO auction at week open, we anticipate a less frantic start to trading for the week.
The CBN continued to support the Foreign Exchange market, notably injecting $210 million at week open into various segments of the market. With this, the naira depreciated ₦0.30 and ₦1.00 w/w at the I&E FX Window and in the parallel market to close at ₦361.05 and ₦362.00 respectively. We expect the naira to remain stable across the various windows of the currency space as the CBN continues to intervene in the FX market.
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