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Weekly Market Wrap - 13 April 2017

​Early Losses see ASI slip w/w
Ahead of a 2-session holiday (Easter holiday), the Nigerian bourse closed marginally 5bps up following another mixed trading session across key sectors. On a w/w basis, all the sectors closed lower - Banking (-40bps), Consumer Goods (-158bps), Industrials (-155bps), Oil and Gas (-306bps) - pulling the ASI lower 92bps w/w. Although marginal just like in previous session, we believe the sustained positive market gains and market breadth (18 gainers vs 13 losers) suggest the profit taking that weighed on the ASI earlier in the week has cooled off to some extent. We believe this improved sentiment would lift the market to a green open next week Tuesday (after the Easter break).

Bond Auction underwhelms amidst liquidity squeeze
Amidst the underwhelming sale in the April Bond Auction, the bond market traded broadly bearish with yields on all maturities racing north by week close. We note that market sentiment turned significantly bearish at midweek as CBN ramped up its interventions even as the April Bond auction took place. Considering the muted trading activity at the end of the week, we anticipate a cautious start to the week as market participants eye the rate of further CBN interventions.

The CBN consistently intervened in the foreign exchange (FX) market during the past week, conducting a range of spot and forward currency sales. Amidst this, the naira appreciated ₦0.10 w/w against the dollar in the official market to close at ₦306.05 whilst depreciating ₦10.00 w/w at the parallel market. We expect the CBN to persist in efforts to provide foreign exchange to priority areas of the economy and anticipate continuous improvement in market liquidity.