Weekly Market Wrap - 15 September 2017
The Nigerian bourse ends the week under
With all key sectors closing in the red, the Nigerian stock market shed 184bps at week close to bring w/w loss to 265bps. We note that market sentiment remained tepid all week, indicated by the consistently negative market breadth. We expect this sentiment to filter into next week and anticipate a negative week open.
Stock Watch: ZENITHBANK has shed 7% in a bearish streak over the past seven sessions. The stock trades at ₦22.10, below consensus target price of ₦27.60. The stock has returned 50% ytd.
PMA stop rates guide secondary market yields lower
Amidst continued OMO auctions at week open, sentiment turned mixed in the T-bills market. At mid-week, the CBN conducted a T-bills Primary Market Auction, offering and selling ₦174.15 billion across the 91DTM, 182DTM and 364DTM bills at stop rates of 13.25%, 17.361% and 17.750% (effective yield: 13.70%, 19.01% and 21.5678%); the CBN lowered stop rate on the long-dated bill at the auction in line with market expectation. Following this, bullish trading dominated the T-bills market as yields declined 75bps on average w/w. In the bond market, sentiment further waned at week open amidst tepid trading activities. However, following the postponement of the bond auction by the DMO on Wednesday (initially scheduled for next Wednesday) and the lower rates from the T-bills auction, there was a resurgence in demand across the bond market as yields on benchmark bonds declined 13bps and 9bps on Wednesday and Thursday respectively. The resurgence in demand was sustained till week close with yields on benchmark bonds dropping by a further 4bps on Friday.
The CBN sustained its consistent interventions in the currency market, conducting an array of spot and forward sales. Worthy of note is the c.$250 million currency sale on Monday across the different currency windows.
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