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Weekly Market Wrap - 25 August 2017

NSE ASI records consecutive weekly loss                                            

Lifted by the Consumer Goods sector, the Nigerian equity eked out a modest 19bps gain today, even with negative closes across other key sectors. However, in a week when the ASI direction was mostly guided by movements across the major Industrial Goods names, the ASI closed 74bps lower w/w. Notwithstanding the overall green close, market sentiment remained tepid today – indicated by negative market breadth as well as lower closes for several large caps. We therefore foresee further bearish trading at week open.                           

Stock Watch: After hitting a three-year high of ₦46.00, UNILEVER has since shed 10% over the last four session. However, at ₦41.30, the stock still trades above consensus target price of ₦30.69, and has returned 18% ytd.          

Trading turned mixed in Fixed Income market                                               

With sustained OMO auctions suppressing system liquidity, the Fixed Income market opened the week mixed with a bearish bias as yields moved in opposite directions. By week close, the market closed with a mild bearish sentiment as yields on benchmark bonds notched 2bps on average. After starting off the week on a bearish note, trading in the T-bills market turned mixed with a bullish tilt from mid-week till week close amidst a ₦95.60 billion maturity. We expect yields to trend further north in the T-bills space given the tight liquidity at week close and anticipated mop-ups next week. The bond market is however expected to remain mixed, with mild interest skewed towards the longer dated bonds.

The CBN sustained its interventions in the currency market, conducting an array of spot and forward sales. Worthy of note is the c.$195 million currency sale on Monday across the different currency windows. We expect further CBN interventions in the coming week to sustain liquidity in the foreign exchange market.