Force majeurs hinders Bonny Light's exports   
• Exports of Bonny Light remain shut-in as a result of the Force Majeure placed by Royal Dutch Shell following the shutdown of the Nembe Creek Trunk Line, a development which threatens nearly 200,000 barrels a day of Nigeria’s oil. We note that oil production averaged 2 mb/d in the first four months of the year, below the 2018 Budget benchmark of 2.3 mb/d, as the country has tried to maintain its crude production within the OPEC threshold. The ongoing challenges with Bonny Light (Nigeria’s third largest crude oil stream) could pose a further threat to Nigeria achieving its oil production objectives, but we expect strong oil prices (hovering around $80/bbl) to support government earnings. 

Market opens mixed, albeit with notable sell pressure 

* Interbank call rate advanced 867bps to 16.50%, even in the absence of any liquidity mop up by the CBN.

 * Trading in the T-bills market persisted mixed at the start of the week as yields dipped 6bps on average. In particular, whilst yields on the 24DTM and 227DTM bills advanced 68bps and 55bps to 13.40% and 13.69% respectively, yields on the 52DTM and 304DTM bills declined 52bps and 42bps to 12.31% and 14.02% respectively. Trading in the bond market was similarly mixed albeit with a more beaish bias as yields rose 5bps on average. Whilst some buying was observed on short-dated bonds, sell pressure dominated the mid-long end of the space. In particular, whilst yield on the 15.54% FGN FEB 2020 bond declined 21bps to 12.84%, yields on the 10.00% FGN JUL 2030 and 12.1493% FGN JUL 2034 bonds advanced 16bps and 23ps to settle at 13.54% and 13.52% respectively. 

* We expect market participants to tread cautiously ahead of today’s MPC decision. We expect the committee to maintain all policy tools at their current levels.

 ? Banking sector losses weigh on bourse 

* The NSE ASI shed 12bps on the back of a red close in the Banking sector.

 * The Banking (-21bps) sector was the only loser yesterday as losses in ACCESS (-183bps), UBA (-131bps) and GUARANTY (-114bps) beat out gains in UBN (+492bps), ETI (+194bps) and ZENITHBANK (+18bps). In contrast, the Oil & Gas sector (+52bps) led gainers following a positive performance by FO (+490bps). The Industrial Goods sector (+28bps) was next in line following a 62bps gain in WAPCO. Finally, the Consumer Goods sector closed 13bps higher yesterday as advances in UNILEVER (+100bps), DANGSUGAR (+80bps) and NB (+41bps) outweighed declines in FLOURMILL (-272bps) and DANGFLOUR (- 47bps). 

* Market breadth turned positive with 26 advances and 22 declines.

 Market Outlook ? 

* Key market indicators give a mixed view of trading activity: market breadth was narrowly positive and many key sectors closed higher but intraday trading momentum was mostly negative. We expect this mixed pattern to persist in today’s session. ? 

 Stock Watch

 FBNH has shed 13% in the last seven sessions. The stock currently trades at a price of N10.75 (below Vetiva target price of N12.82) and has returned 22% ytd.
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