FREE

Weekly Market Wrap - 22 September 2017

                                               

Equity market lifted by advances in select blue-chips                                          

Following four sessions of sideways trading across sectors, the Nigerian equity market, buoyed by advances in select blue chip stocks, rose 85bps on Friday to close the trading week 138bps higher. Notwithstanding the sideways trading for the most part of the week, we note the bullish tilt at week close as well as recovery in select blue chips. We therefore expect further sideways trading at week open, albeit with a more bullish bias                                           

Stock Watch: After rallying to a one-year high of ₦63.00, following impressive H1’17 results, WAPCO went on a bearish streak, dipping 23% to ₦48.54 over 24 sessions. The stock has however shown some signs of recovery in recent sessions, rising 6% in the past three sessions to close at ₦51.48, compared to Consensus target price of ₦69.21. Overall, the stock has returned 26% ytd.                                      

Bullish trading persist in T-bills Market at week close                                          

The T-bills market opened the week with bullish sentiment despite a ₦60 billion OMO Auction at week open. Amidst lower stop rates at Wednesday’s Primary Market Auction, as well as an OMO maturity of ₦141 billion on Thursday, the positive sentiment was sustained throughout the week with yields moderating 14bps on average across the space. In the bond market, whilst tepid activity dominated the first two trading sessions of the week, sentiment quickly turned bullish by mid-week as buying sentiment from the T-bills market filtered in. We expect sentiment to remain bullish in the fixed income market at week open. However, we expect trading in the bond market to turn cautious ahead of the PMA scheduled for Wednesday where DMO will be offering ₦135 billion across the 5 year, 10 year and 20 year bonds.

On the currency front, the CBN continued its interventions, injecting $545 million across various windows of the inter-bank foreign exchange market.  Following this, the naira depreciated ₦0.03 to close at ₦360.39 at the I&E FX Window, but depreciated ₦2.00 in the parallel market atto close at ₦365.00 against the dollar.