Tuesday, 2 October 2012

Dear Afrinvestor,

Please find below our Weekly Update for the week ended 28th September, 2012.
Key Highlights: -

Macroeconomic /Socio-Political Update
·         The Federal government has announced preferred bidders for five state power generation plants; A Consortium consisting of Transcorp, Symbion Power LLC, Medea Development, Thomassen Holding Limited and PSL Engineering has won the bid for the acquisition of the 972 mega watts capacity Ughelli Power Plant, while the Amperion consortium emerged preferred bidder for the 414 MW-capacity Geregu Power Plc in Kogi State.

·         The Nigerian Communications Commission (NCC) has revealed plans to introduce the mobile number portability function for mobile phone users in December 2012.

Equity Market Review & Outlook
·         Equities recorded mixed performances globally.

·         The Nigerian market however closed on the upside, with a 50bps increase in the benchmark Index.

Money Market Review & Outlook
·         The money market closed in liquid territory last week, as existing cash in the system coupled with maturing notes outweighed weekly debits for WDAS and T-bill auctions.

·         We expect money market rates to inch up moderately this week.

Foreign Exchange Market Review & Outlook
·         The CBN offered and sold US$450.0m at the WDAS last week. The Naira remained unchanged at N155.78/US$1.00, despite a 45.4% rise in week-on-week Dollar demand.

·         We expect to see minor depreciation in the domestic currency this week.

Bond Market Review & Outlook
·         The FGN bond market swung between bulls and bears last week, with price increments recorded by most short tenured instruments (ex the 5yr 15.10% FGN APR 2017 and 7yr 16.00%FGN JUN 2019), while bearish sentiments were predominant at the long end of the market.

·         We expect mixed sentiments will persist in the domestic bond market this week.

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