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Weekly Market Wrap - 22 February 2019

Market moderates 16bps to end a quiet week                                                  

Following a mixed session today, the NSE ASI lost 16bps, taking WTD returns to a 61bps loss. Barring any negative surprises at the polls, we anticipate a positive start to next week’s trading as investors price in improved certainty upon conclusion of the general elections.                                                            

Stock Watch: JAPAULOIL is the best perfoming stock on the exchange this week, gaining 25% over three of five sessions. The stock gained 8.70% today to settle at ₦0.25, its highest price since September 2018.                                                           

T-Bills trades bullish after a slow-down in OMO auctions                                                            

The CBN conducted two OMO auctions this week, selling a total of ₦688 billion from an offer of ₦650 billion on Thursday, whilst there was a No Sale on Monday. Meanwhile, the DMO conducted its February Bond Auction on Wednesday, selling the full allotment of ₦150 billion across the 5-year, 7-year and 10-year maturities at stop rates of 14.52% and 14.79% and 14.94% respectively – lower than previous levels. With the CBN epected to further reduce the pace of OMO auctions, we foresee increased demand in the t-bills space next week. Meanwhile, we anticipate a quiet session at the start of next week, with investors picking up interest towards the week-end.                                                           

The Naira appreciated ₦0.16 w/w at the I&E FX Window to settle at ₦361.49 against the dollar and appreciated ₦2.00 w/w to settle at ₦358.50 in the parallel market. We expect the naira to remain largely stable across the various windows of the currency space as the CBN maintains interventions in the FX market.