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Weekly Market Wrap - 4 May 2018

Mixed sentiment persists at week close                                                             

The Nigerian equity market closed out the week in the green, rising 27bps today however posting a 6bps w/w decline. Despite the positive market breadth and green close on the last trading day of the week, we note that market sentiment remains mixed given even split between sector gainers and losers. We expect this sentiment to persist at the start of the coming week even as the last batch of Q1’18 earnings roll in.                                                                                      

Stock Watch: CILEASING has gained 38% over the last seven sessions. The stock was the biggest gainer for the week following the release of strong Q1’18 results reporting ₦6.5 billion in Revenue and ₦373 million PAT. It currently trades at a price of ₦1.80 and has returned 40% ytd.                                                    

Sell pressure drives yields higher at week close                                                              

Mixed sentiment persisted throughout the week, even as yields declined 5bps on average in the T-bills space and advanced 18bps on average on benchmark bonds. Sell pressure was observed in the T-bills space today with yields advancing 10bps on average in the space. Trading in the bond market was likewise negative as yields on benchmark bonds advanced 17bps on average on the day due to increased selling activity from off-shore players. Whilst we expect healthy system liquidity to support buying at week open, we note strong sell pressure at week close and expect this to cap buying at the start of the week.

The CBN continued to intervene in the Foreign Exchange market, notably selling $210 million at week open across various segments of the market. With this, the naira depreciated ₦0.34 w/w at the I&E FX Window to close at ₦360.75 while appreciating ₦0.50 in the parallel market to close at ₦361.00. We expect the naira to remain stable across the various windows of the currency space as the CBN continues to intervene in the FX market.