Weekly Market Wrap - 2 June 2017
Bullish start to June on the exchange
Stretching gains to eight sessions, the Nigerian equity market closed 349bps higher today (+794bps w/w). Notwithstanding the possibility of profit taking, we believe the market will record another bullish streak in the coming week amidst sustained robust market activity and strengthened buying momentum at week close.
Stock Watch: Market leader DANGCEM hit a 2017-high of ₦192.93 today. Sealing the week with a 500bps gain, the cement maker has advanced 19% over the past seven sessions and has returned 11% ytd.
Ample liquidity sustains bullish trend in T-bills market
Boosted by buoyant system liquidity, the T-bills market traded bullish through the week with yields moderating across the curve. At mid-week, the Central Bank of Nigeria conducted a Primary Market Auction, selling ₦117 billion across the 91DTM, 182DTM and 364DTM bills at respective stop rates of 13.400%, 17.139% and 18.650% (effective yields: 13.86%, 18.74% and 22.91%). Given that stop rates at the PMA closed lower than secondary market levels, buying sentiment further strengthened in the bills market on Thursday. Overall, yields in the T-bills market declined 66bps w/w on average. The bond market was relatively quiet this past week, opening the week slightly bullish but turning mixed towards week close. We expect yields to trend further south in the bills space given the ample liquidity at week close, whilst the bond market remains relatively quiet.
The CBN sustained its consistent interventions in the currency market, conducting an array of spot and forward sales. Worthy of note is the c.$460 million currency sale on Tuesday across the different currency windows. Over the week, the naira appreciated ₦1.66 at the NAFEX window and ₦8.50 in the parallel market to close at ₦378.56 and ₦371.00 respectively against the dollar. We expect further CBN interventions in the coming week to continue to sustain liquidity in the foreign exchange market and possibly further prop up the naira.
Vetiva provides clients with independent and unbiased access to analysis and opinion. We keep our clients on the cutting edge of market information and provide up to date market intelligence on quoted companies. Our services allow brokers, investment firms, and asset managers focus their energies on developing investment strategies and client relationships.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.