Dear Afrinvestor,

Please find below our Weekly Update for the week ended 20^th July, 2012.

Key Highlights: -

Macroeconomic /Socio-Political Update

·         The federal government in her bid to improve the transportation network in the country, has approved a contract worth US$1.48bn for the construction of Lagos Ibadan standard gauge rail project.

·         UAC of Nigeria has announced plans to acquire a majority stake in Portland Paints of Nigeria Plc.

Equity Market Review & Outlook

·         Global equities showed mostly positive performances last week.      

·         The Nigerian All-Share Index continued on its bullish performance last week, though ending the last two days with a loss.

Money Market Review & Outlook

·         The money market closed in a tight liquid state for the third week  running, as outflows for WDAS and Bond auctions exceeded the inflows from a T-bill maturity.

·         We expect money market rates to dip this week, due to envisaged FAAC credits for the month of June 2012.

Foreign Exchange Market Review & Outlook

·         The CBN offered a total of US$500.0m at the WDAS last  week. The Naira recorded no change throughout last week, to close at N155.87/US$1.00.

·         We expect the Naira to remain relatively stable this week.

Bond Market Review & Outlook

·         The bond market was predominantly bullish last week, with all instruments excluding the 7yr (16.00% FGN JUN 2019) increased in price, as their respective yields dropped.

·         We expect bullish sentiments to continue in the bond market this week.