NIGERIA | Daily Market Wrap | 30-Nov-2017 | Elixir Research


30 Nov NIGERIA | Daily Market Wrap | 30-Nov-2017 | Elixir Research

Market Wrap-up | Macro recovery lifts Nigerian Bourse; FGN debt market mixed; interbank rate jumps higher


Macro recovery lifts Nigerian Bourse

  • With today’s session marking the end of trading in November, the Nigerian Stock Market has returned 3.45% (compared with 3.50% in October and -0.18% in September) with all major sector indexes also ending in green. This positive outplay came despite the mixed sentiments that trailed trading in the month on the back of encouraging third quarter corporate earnings releases, slower inflation rate―15.91% in October, economic recovery that saw GDP growth print at 1.4%, early budget presentation and the successful $3 billion Eurobond issue. This was also supported by a stable monetary and foreign exchange policy from the Central Bank. However, there were some negatives that dampened sentiments. The removal of some stocks from the MSCI Frontier Market Index and the Moody’s investor downgrade of the sovereign and some bank’s ratings impacted market mood. As we progress into the last trading month of 2017, we anticipate an extension of the current mood. The agreement to extend crude output cut until end of 2018 in the just concluded OPEC meeting should provide support for the market though Nigeria’s output was capped at 1.8mbpd


FGN debt market mixed today; interbank rate jumps higher

  • The banking system balance opened at ₦174.12 billion, up from ₦125.37 billion while, the balance on the CBN lending window stood at ₦153.65 billion, down from ₦177.42 billion. Despite this, overnight and OBB rate leapt by 17.17 and 14.67 percentage points to 29.08% and 25.83% respectively―signaling liquidity uneasiness within the banks.
  • The CBN conducted another OMO auction today, offering ₦50 billion of the 91DTM and ₦150 billion of the 189DTM bill. Result of the sale was not available at time of writing.
  • Meanwhile, sentiments was mixed at the FGN debt market. The average T-Bill yield fell just by 1 basis points to 17.78%, despite the buying interest across the yield curve. The average bond yield however, rose by 17 basis points to 15.07%, driven by strong selloff across the bond yield curve.
  • There was an inflow of about ₦132 billion inflow from OMO maturity today but the CBN auction would have neutralized the impact on liquidity.


Naira falls at I&E window

  • The Naira lost 0.17% at the IEW to close ₦360.65/$ from $360.02 on Wednesday. It remained at ₦364/$ at parallel market while it fell 0.08% to ₦306/$ at CBN window.
  • Volume trade at the IEW contracted to 86.99 million Dollars from 218.66 million Dollars on Wednesday.
  • We remain confident on the near-term stability of the local currency given FX reserves in excess of $34 billion


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