Weekly Market Wrap - 2 February 2018
Bulls sustain gains at week end, ASI up 198bps w/w
After an even split between sector gainers and losers, the Nigerian equity market (+40bps) posted a green close on the day. Despite recording a mid-week loss, the bourse bounced back from last week’s negative w/w close, closing 198bps up w/w. We note the renewed interest on select banking names at the end of the week, we expect this to filter into the start of next week. We however foresee an overall mixed session as investors continue to cherry pick.
Stock Watch: After closing in negative territory all week long, NB shed 5% of its value w/w. The stock currently trades at ₦144.50, slightly below Vetiva target price of ₦146.51 and has returned 7% ytd.
T-bill yields decline w/w on slight liquidity improvement
Though the T-bills market opened the week with a slightly bearish bias, sentiment turned bullish going into mid-week ahead of the CBN’s T-bills Primary Market Auction. The bank eventually sold c.₦354 billion on Wednesday across the 91DTM, 182DTM and 364DTM bills at respective stop rates of 12.00%, 13.65% and 13.70%, all lower than previous last PMA (previous: 12.10%, 13.75% and 13.79%). The T-bills market ended the week on a positive note as yields moderated 41bps on average w/w. The bond market was broadly mixed this past week with minimal yield movements noted across benchmark bonds. Whilst we observed modest demand at the short end of the curve, long-dated bonds came under slight sell pressure over the course of the week, with yield on the 16.2499% FGN APR 2037 bond advancing 10bps.
The CBN continued its liquidity injections into the Foreign Exchange Market at week open, injecting $210m across various segments of the market. Amidst this, the naira depreciated ₦0.35 w/w at the I&E FX Window to close at ₦360.70 whilst it appreciated ₦1.00 w/w in the parallel market to close at ₦362.00. We expect further CBN interventions in the coming week to sustain liquidity in the foreign exchange market.
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