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Weekly Market Wrap - 18 August 2017

Market rebounds at week close, ASI still down w/w                                     

The NSE ASI recorded a second successive session gain on today, closing 166bps higher, but still shed 335bps over the course of the week on the back of losses recorded at week open. With buying momentum strengthening at week close, particularly on notable banking names, we foresee a positive start to trading next week.                              

Stock Watch: After rallying to a five-year high of ₦193.00 at the beginning of the week, NB has lost 6% over the last four sessions to settle at ₦181.02 - still above consensus target price of ₦139.81.                                   

Trading turned mixed in Fixed Income market                                               

With sustained OMO auctions suppressing system liquidity, the Fixed Income market open the week mixed with a bearish bias as yields moved in opposite directions. Amidst this, sentiment turned bullish in the T-bills market at mid-week as yields converged towards the lower rates recorded at the PMA. Despite the CBN sustaining the liquidity mop-ups in order to constrain liquidity, the T-bills market closed the week relatively upbeat with yields shedding 5bps on average. However, the market closed the week with mild bearish sentiment as yields on benchmark bonds notched 2bps on average.                                 

The CBN sustained its interventions this week, carrying out currency sales. Amidst these, the naira appreciated ₦4.74 at the official spot market but depreciated ₦2.50 at the parallel market to close at ₦305.70 and ₦368.00 respectively against the dollar. Meanwhile the naira appreciated 4.80 to settle at ₦359.98 at week close at the NAFEX window.