Weekly Market Wrap - 6 October 2017
ASI up 135bps as Nigeria bourse extends gaining streak
Amidst firmly improving positive market sentiment, the Nigerian Equity Market ended this shortened trading week firmly in the green – NSE ASI up 153bps (+249bps w/w). The strong gains notched in the second half of the week pared losses recorded at week open as the NSE ASI rose 249bps w/w. We expect the positive market momentum to persist at the start of next week, and anticipate further demand on blue chip stocks.
Stock Watch: PRESCO has advanced 15% in the last two sessions, rallying to ₦68.00, below consensus target price of ₦80.76. The stock has returned 70% ytd.
Bullish trading sentiment dominates T-bills space
Despite continued OMO auctions by the CBN through the shortened trading week (₦422.5 billion mopped up), trading in the T-bills market was predominantly bullish this past week as expectations of lower rates continued to guide trading sentiment. The lower rates recorded at the PMA, coupled with net OMO inflow on Thursday fueled further buying in the T-bills space till week close, with yields in the space declining 66bps w/w on average. Similarly, the bond market started the week with significant buying momentum, with yields across the benchmark bonds declining 33bps and 60bps on Tuesday and Wednesday. However, following this sizeable buying sentiment cooled off in the later trading sessions and slight selling pressure surfaced across the space. Overall, yields on benchmark bonds declined 68bps on average w/w.
On the currency front, the CBN continued its interventions, injecting another c.$195 million across various windows of the inter-bank foreign exchange market on Tuesday. The naira depreciated ₦1.08 at the I&E FX Window and appreciated ₦7.00 in the parallel market to close at ₦360.64 and ₦361.50 respectively against the dollar over the week.
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