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Weekly Market Wrap - 7 April 2017

Friday Blues cap bullish week on NSE

Driven by mixed trading across key sectors, the Nigerian equity market closed flat at week close (NSE ASI: -3bps), albeit notching 90bps w/w in the first trading week of Q2. Whilst we note the underlying positive sentiment in the market, we highlight the sizeable gains recorded across select large cap stocks this week as a pre-cursor for profit-taking at week open. Thus, we expect trading to be varied in the coming week as positive sentiment is capped by sustained profit-taking.

DMO to offer N135 billion at April bond auction

Amidst the auction calendar release, the Fixed Income market traded mixed albeit with a slightly bullish bias. Though we highlight the residual buying sentiment at week close, we anticipate slightly cautious trading on bonds at the start of next week ahead of the April Bond Auction on Wednesday. Meanwhile, we expect T-bills market to continue to trade mixed at week open.

On the currency front, while continuing its Secondary Market Intervention Sales, the CBN also intervened in the BDC segment of the market on Tuesday and Wednesday by directing further flows from International Money Transfer Operators to BDCs. Despite this, the naira depreciated ₦10.00 against the dollar at the parallel market to close the week at ₦405.00. Whilst we foresee further stability in the official market, we highlight the uptrend in the parallel market rate despite persistent CBN foreign exchange sales. Nevertheless, we expect the apex bank to continue its dollar supply in a bid to further improve liquidity.