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Weekly Market Wrap - 15 February 2019

Pre-election week ends on a positive note                                    

In its fourth positive session this week, the Nigerian Bourse advanced 81bps d/d, contributing to a 3.76% gain w/w. We expect to see a market rally at the start of the week driven by a return of certainty following the successful conclusion of the presidential election, barring any political unrest from the election results.                                         

Stock Watch: LIVESTOCK posted strong gains this week, appreciating 44% after green closes in four out of five sessions. The stock gained 9% today to close at ₦0.72, trading at its year-high price with a year-to-date return of 47%.                                               

Expect a quiet open to the week in FI market                                          

This week, the CBN remained active in the Primary market, conducting three OMO auctions and selling c.₦545 billion (₦740 billion offered) across the short, mid and long-dated bills at stop rates of 11.90%, 13.50% and 15.00% respectively. Notably, there was a “No sale” on Tuesday even as investors keyed in bids at same stop rates for the ₦65 billion offered. The CBN also conducted its bi-monthly T-bills PMA, offering and selling ₦153 billion across the three bills at stop rates of 10.97%, 13.40% and 14.95% respectively – lower than previous PMA auction stop rates. With a base expectation of a relatively peaceful and favourable close to the general elections, we anticipate a rally in riskier asset classes and foresee a quiet open to the week in the FI market even as investors begin to take positions ahead of the Bond auction on Wednesday.                                               

The Naira appreciated ₦0.08 w/w at the I&E FX Window to settle at ₦361.65 and depreciated ₦1.00 w/w to settle at ₦360.50 against the dollar in the parallel market.