Monday, 14 May 2012

Dear Afrinvestor, Please find below our Weekly Update for the week ended 11th May, 2012.
Key Highlights: -
 Macroeconomic /Socio-Political Update·         South Africa's consumer foods maker, Tiger Brands, recently expressed interest in Dangote Industries’ stake in its flour milling unit.
 ·         The National Economic Council (NEC) has approved the increase in energy tariffs in the country to commence June.
  Equity Market Review & Outlook·         Globally, equities turned in a weak performance. U.S stocks depreciated, following the biggest weekly decline in 2012, as the election of the new France president, Francois Hollande, triggered concern about Europe’s debt crisis.
 ·         Similarly, the Nigerian equity market shed marginal points last week, ending a three week rally despite closing on a positive note on the last trading day.  

 Money Market Review & Outlook·         Interbank rates inched up further last week, as debits for WDAS, OMO and T-bill auctions ensured the money market closed the week in an illiquid state.
 ·         We expect money market rates to hover around current levels this week, with the possibility of a moderate hike in rates at the end of the week.
  Foreign Exchange Market Review & Outlook
·         The CBN offered and sold US$270.0m at the WDAS last week. The marginal bid rate at both auctions was N155.75/US$1.00 with the Naira losing 5k to the Dollar from its previous close price and on a week-on-week basis
 ·         We expect to see improved Dollar supply at the interbank and official markets this week, with possible appreciation in the Naira at the WDAS.
  Bond Market Review & Outlook·         Mixed sentiments prevailed in the bond market last week, with yields dipping on all 3yr, 5yr, 7yr and 20yr instruments excluding the 5yr 15.10% FGN April 2017. The Nigerian Eurobond lost 64cents in its price from US$110.34 in the previous week to US$109.69, as its yield subsequently increased by 8bps from 5.26% to 5.34%.
 ·         We however expect a further dip in the Eurobond price on account of a possible decline in the price of bonny light.
     Please click on the image below to view the Afrinvest Weekly Update.
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Investment Research

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