Weekly Market Wrap - 3 November 2017
Nigerian bourse closes the week in the green
Despite continued mixed sentiment across key sectors, the Nigerian Equity Market closed marginally higher (+17bps) today, leading to a 131bps w/w gain. Given the slightly positive market breadth (Advances – 23; Declines - 19) and strong closes across a few key sectors, we anticipate a bullish trading slant at week open.
Stock Watch: After gaining 15% over three consecutive sessions, FBNH declined 84bps today. The stock currently trades at ₦7.05, below Vetiva target price of ₦8.64, and has returned 101% ytd. We note that the company released its 9M’17 results last week, reporting better than expected performances across most key line items with top and bottom lines coming in 6% and 8% stronger y/y.
PMA continues to guide FI Market rates lower
Notwithstanding constrained liquidity, sentiment in the T-bills market was bullish last week, with yields moderating 76bps on average w/w. Buying sentiment was supported by a ₦102 billion OMO maturity and the result of Wednesday’s T-bills Primary Market Auction, where the CBN offered c.₦101 billion and sold c.₦152 billion across the 91DTM, 182DTM and 364DTM bills at lower stop rates of 13.10%, 15.28% and 15.60% (effective yield: 13.54%, 16.54% and 18.47%). Meanwhile, the bond market was largely muted for most of the week, with light buying activity weighted at the short end of the space and yields declining 4bps on average. Whilst we expect healthy demand to persist across the FI market next week as investors look to lock in high rates in anticipation of further rate decline, we expect yield moderations to be capped by the steady pace of OMO mop ups
The CBN continued to support the naira with liquidity injections into the Foreign Exchange Market at week open, selling $195m across different windows in the currency market. We expect continued CBN interventions in the coming week to further sustain liquidity in the foreign exchange market.
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