Equities Market –
The equity market kicked-off the week on a positive note as it continues to recover losses booked in the first three sessions of last week. The recovery comes against a backdrop of uncertainty in the oil market as traders question the viability of the OPEC-led production cut. The benchmark index rose by 0.48% to 32,614.60 points, pushing the year-to-date gain to 21.36%.

Sector performance was mixed. On a positive note, the banking index jumped 1.97% off the back of interest in the likes of UBA (4.94%), ACCESS (4.93%), UNITYBNK (4.92%), ZENITHBANK (3.45%), DIAMONDBNK (2.48%), FCMB (2.42%) and FIDELITYBK (2.38%). The oil and gas index gained 0.21%, lifted by OANDO (4.82%). The industrial index was unchanged as all index members closed the session flat. On a negative note, the insurance index lost 0.24%, weighed down by MANSARD (-4.78%); CONTINSURE was up 4.62%. The consumer goods index was marginally down 0.08% with the notable decliners being VITAFOAM (-4.81%), CADBURY (-4.08%) and NB (-0.64%); FLOURMILL mitigated index loss as it rallied by 9.75%.

General market breadth was positive as the session registered 26 gainers and 15 decliners. The top three gainers were FLOURMILL (9.75%), CILEASING (5%) and REDSTAREX (5%) while the top three losers were UBN (-8.82%), SKYEBANK (-5%) and UPL (-5%). Investors traded 182.07 million shares worth ₦2.03 billion.

We market continues to trade within the 32,000-33,000 points range as traders await the Q2 earnings season which should help the market position following the FX-fueled rally that kicked-off in April. The outlook for Q2 earnings is positive and we expect the market to get a small lift from the numbers. The medium-term sustainability of the rally will depend on oil prices which increasingly looks set for another down leg. This risk should moderate any gains attached to the Q2 earnings season.

Money Market & Fixed Income –
The average inter-bank repo rate jumped 474bps to 21.07% as liquidity remains under pressure following the sale of $254.30 million last Friday. Yield were on the rise (albeit slightly) at the FGN debt market which could be a function of the FX sale on Friday. The average T-Bill yield added 7bps to 20.05% despite yields dropping across many maturities. The average bond yield was up 4bps to 16.86% as yields rose at the short and long-end of the yield curve.

Foreign Currency –
The Naira was unchanged against the US Dollar at the inter-bank market and closed the session at ₦306/$. Last Friday the CBN sold $254.30 million to companies in the raw material, agriculture, airline and petroleum industries. The sale is a continuation of the CBN’s supply side measures to boost growth and the Naira. The Naira was up 0.87% against the US Dollar at the I & E window to ₦361.86/$ and appreciated by 0.81% against the US Dollar at the parallel market to ₦367/$.