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Weekly Market Wrap - 5 May 2017

NSE ASI completes all-week gain streak
Positive sentiment persisted on the Nigerian equity market this week, with the NSE ASI racking up gains all week long to close 185bps higher w/w. Whilst market sentiment remained positive at week close, we note that momentum slowed towards the end of the week as investors began to take profit on recent gains (ASI up 4% in 9 sessions). In the coming week, we foresee continuous profit taking across stocks that have recorded sizeable gains in recent sessions.

Stock Watch: Following a five-day bull run, FIDSON has gained 44% and currently trades at ₦1.58 – a seven-month high. The stock has returned 23% ytd.

Fixed income market closes week on bearish note
The bills market opened the week on a bullish note spurred by the liquidity boost at last week's close but turned bearish following pressured liquidity and higher than expected yields at the recent PMA. However, the bond market carried over bearish sentiment from the previous week with selloffs observed across the curve. With pressured liquidity driving selloffs across the curve, we expect sustained bearish trading at the start of next week.

The CBN sustained its consistent interventions through the week, carrying out a spate of currency spot and forward sales. Towards week close, the CBN announced that foreign currency would now be made available for importation of previously ineligible items at the recently opened SME FX window. The importers would be able to access a maximum of $20,000 per quarter for these items. We expect the recent CBN moves to expand FX access to importers to further support market liquidity.