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Weekly Market Wrap - 29 September 2017

Mixed week sees ASI lose 14bps w/w                                      

Amidst mixed investor sentiment, the Nigerian Equity Market ended this trading week with a marginal positive bias, up 3bps today. On a w/w basis however, the NSE ASI slipped 14bps largely pulled down by declines early into the week. Despite the positive market momentum towards week close, we note investor cherry-picking across the market amidst an overall cautious sentiment. We expect this to filter into next week and anticipate sideways trading at week open.                                   

Stock Watch: CILEASING has gained 28% in six consecutive sessions. The stock currently trades at a 6-year high of ₦1.63 and has returned 226% ytd.                               

Lower stop rates from DMO spurs demand in Bond market                        

The T-bills market started the week mixed with a slightly bearish bias amidst a ₦60 billion OMO auction. This sentiment continued till mid-week with the CBN conducting OMO auctions worth ₦55 billion in anticipation of the ₦123 billion OMO maturity on Thursday. Notably, the CBN lowered rates further at the OMO auction conducted on Thursday, with stop rate on the mid dated bill reduced to 17.93% (previous: 17.95%). At week close, sentiment remained broadly mixed, with average yields in the T-bills market advancing 14bps w/w. Whilst the bond market started off the week on a quiet note, trading turned bullish by mid-week as participants positioned ahead of the monthly bond auction on Wednesday. Following lower than expected stop rates recorded at the auction, buying strengthened in the bond space with yields moderating significantly across the space. Overall, yields on benchmark bonds declined 22bps on average w/w.                               

On the currency front, the CBN sustained its consistent interventions, conducting an array of sales. Notably, the c.$195 million currency sale on Monday across the different currency windows.