Weekly Market Wrap - 24 November 2017
Friday close bumps market into the green
A strong positive close today (+185bps) lifted the NSE ASI into the green for the week after a mixed trading week (+180bps w/w). With strong positive closes across key sectors and consistently positive market breadth at week close, we expect the healthy positive sentiment to filter into the start of next week.
Stock Watch: UNILEVER has advanced 11% over the last four sessions and currently trades at ₦40.90, well above Vetiva target price of ₦26.10, returning 17% ytd.
Predominantly bullish week for F.I securities
Trading in the T-bills market was mixed at the start of the week amidst a ₦60 billion OMO auction. Sentiment however turned upbeat as the week progressed with ₦201 billion OMO maturity on Thursday further supporting sentiment. At week close, buy sentiment remained predominant with yields moderating 44bps on average w/w. The bond market started the week quite positive as further details around the impending Eurobond issue spurred demand. Trading however turned mixed at mid-week as investors treaded cautiously amidst the monthly bond auction on Wednesday. Demand remained healthy at week close as yields on benchmark bonds declined 22bps on average w/w. Whilst we foresee demand remaining healthy in the coming week, sustained OMO auctions from the CBN may cap buying momentum. A ₦132 billion OMO maturity on Thursday should support liquidity and also sentiment at later sessions in the week.
On the currency front, the CBN continued its interventions, injecting another c.$210 million across various windows of the foreign exchange market. The naira appreciated ₦0.15 w/w at the I&E FX Window to close at ₦360.25 and remained flat at ₦362.50 in the parallel market. We expect liquidity to remain buoyant as the CBN continues to inject foreign currency into the system.
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