What shaped the past week?

The Punch - - INTERVIEW - Global Mar­kets: Do­mes­tic Econ­omy:

This week, all eyes were fo­cused on the US as Mid-term elec­tions and the Fed­eral Open Mar­ket Com­mit­tee meet­ing drove ac­tiv­ity. On Mon­day, the DOW Jones and S&P 500 in­dices rose thanks to gains in the fi­nan­cial sec­tor. Mean­while, Euro­pean mar­kets closed mixed while Asian mar­kets traded lower as in­vestors re­mained cau­tious over global growth prospects. The trend con­tin­ued Tues­day as US mar­kets closed higher, while po­lit­i­cal un­cer­tainty weighed on Euro­pean and Asian mar­kets. Fol­low­ing the con­clu­sion of the US mid-terms, US mar­kets recorded their strong­est post­midterm elec­tions rally since 1982, and Euro­pean mar­kets also gained while ac­tiv­ity in the Asian re­gion re­mained muted. On Thurs­day, news of the lat­est mon­e­tary pol­icy de­ci­sion from the Fed­eral Re­serve dragged US mar­kets, Euro­pean mar­kets were slightly pos­i­tive. How­ever, Asia mar­kets stayed pos­i­tive, track­ing the Wed­nes­day rally in the US. Global mar­kets closed mixed at the end of the week fol­low­ing the con­clu­sion of the US Fed­eral Re­serve meet­ing.

Nige­rian of­fi­cials will em­bark on a three-day road show in Lon­don at the start of the week ahead of the planned $2.8 bil­lion Eurobond sale this month. The Se­nate ear­lier ap­proved the is­suance of the Eurobond from the In­ter­na­tional Cap­i­tal Mar­ket to fi­nance the 2018 bud­get and this would be the sec­ond Eurobond sale this year af­ter a to­tal sale of $2.5 bil­lion in Fe­bru­ary 2018 to re­fi­nance lo­cal cur­rency debt. The cost of for­eign bor­row­ing is likely to be higher than for pre­vi­ous is­sues, on the back of higher yields in de­vel­oped mar­kets fol­low­ing U.S. in­ter­est rate hikes. A $1.25 bil­lion 20year Eurobond was sold in Fe­bru­ary 2018 at a rate of 7.696% but closed at 8.672% yes­ter­day. As such, we ex­pect the coupon rate on a sim­i­lar-tenored in­stru­ment to breach the 8% mark.

Eq­ui­ties:

Trad­ing pat­tern on the Nige­rian Stock Ex­change re­mained mixed through­out the week, as the All-share In­dex al­ter­nated be­tween neg­a­tive and pos­i­tive ter­ri­tory through all the trad­ing ses­sions in the week. Though the mar­ket closed in the red three out of five times, the ASI closed 23bps higher w/w. No­tably, the largest gain recorded dur­ing the week was on Thurs­day with the ASI ris­ing 37bps thanks to gains in the Bank­ing sec­tor (+102bps d/d), driven by in­ter­est in GUAR­ANTY (+121bps d/d) and ZENITHBANK (+125bps d/d). For the week, Oil & Gas (+160bps) and Con­sumer Goods (+11bps) were the only sec­tors gain­ers, sup­ported by solid per­for­mances in SEPLAT (w/w: +696bps) and NES­TLE (w/w: +735bps). On the other hand, the In­dus­trial Goods (w/w: -381bps) and Bank­ing (w/w: -47bps) sec­tors closed in the red fol­low­ing heavy de­clines in WAPCO (w/w: -14.29%) and CCNN (w/w: -11.60%), and AC­CESS (w/w: -778bps).

Fixed In­come: With the CBN opt­ing to hold off on OMO

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