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Weekly Market Wrap - 22 December 2017

Nigerian bourse closes 22bps up w/w
The Nigerian bourse advanced modestly this past week with the NSE ASI closing 22bps higher week on week (w/w). Given the green close in today’s session as well as the relatively bullish market sentiment– indicated by positive market breadth, we expect another marginally positive trading session when the market resumes on Wednesday and as the year winds down.
Stock Watch: Spurring the rally in the Oil and Gas sector this week, SEPLAT has gained 10% over the last four sessions. The stock currently trades at ₦596.40, below Vetiva’s target price of ₦600.62, and has returned 57% ytd.

FI market turns bearish amidst aggressive OMO resumption
With the CBN choosing to resume OMO auctions at the start of the week, bears resurfaced in the T-bills market on Monday amidst tighter system liquidity. On Thursday however, mild buying interest resurfaced in the T-bills space after a ₦136 billion total T-bills inflow before going quiet at week close. Similarly, the bond market opened the week on a bearish note and maintained this trading pattern till Thursday however, the market went flat on Friday. Whilst we expect demand to remain healthy in the coming week as traders continue to take position in anticipation of lower forward rates, we believe that the CBN’s renewed mop up stance will cap yield moderations across the space. Also, we expect the ₦218 billion T-bills inflow next Thursday to support demand in the market.

We expect the exchange rate to remain stable as the CBN continues to inject foreign currency into the system.