Global Market

Japan merchandise trade balance fell to a JPY 626 billion surplus in April from a JPY 797 billion surplus in March. The moderation in trade balance stemmed from a 5.9% (vs. 0.65% in March) expansion in imports particularly machinery and mineral fuels. On the export leg, stronger shipments of transport equipment, particularly motor vehicles and machinery led April’s exports to rise 7.8% YoY (vs. 2.1% in March). Elsewhere in UK, the disinflation continued for the third con- secutive month as April’s inflation reading slowed to 2.4% (vs. 2.5% in March), gradually moving to the Bank of England’s target of 2%. Over in the United States, new home sales declined 1.5% YoY in April to 662,000-unit from 672,000 (revised figure) in March. Similarly, after rising for the past two months, existing home sales fell 2.5% YoY to a 5.46 million unit.

Domestic Market

GDP figures released by the National Bureau of Statistics (NBS) showed that the Nigerian economy grew 1.95% YoY in Q1 18 compared with 2.11% YoY in Q4 17 (revised figure). The oil sector (+14.8% YoY) was the major driver of the growth in the period, contributing 64.5% to overall growth. Other drivers of growth were the Agriculture and Manufacturing sectors. Also, petroleum data from the NBS revealed that petrol imports in Q1 2018 printed at 5.7 billion litres (+37% YoY, +61% QoQ). The quarterly growth is the highest we’ve recorded so far mirroring the NNPC’s resolution to ensure adequate supply of PMS in the economy. Elsewhere, the Monetary Policy Committee (MPC) concluded its bi-monthly meeting this week where it elected to hold the rate at 14%.

Equities

NGSEINDX continued its losing streak for the fourth consecutive week, shedding -2.84% WoW to end the week at a 4-month low of 39,323.62ppts. IKEJAHO- TEL (+44.49%) led the advancers, followed closely by LAWUNION (+20.99%), NIGERINS (+19.05%), and HMARKINS (+11.11%) while ETERNA (-22.27%), JAPAUL (-20.00%), DANGFLOUR (-16.82%) and TRANSCORP (-16.35%) led the decliners. On a sectorial level, all sectors closed in the negative territory with the Brewers (-5.17%) topping the losing chart followed by Banking (-5.13%) and Oil and Gas (-4.01%) sectors.

Fixed Income Market

Average yields in the Nigerian fixed income market (-1bp WoW to 13.3%) was largely flat this week, as continued selloffs at the long end were neutered by buy pressures across the short end. Precisely, average bond yields closed the week at 13.4% while average Treasury bills yields closed at 13.6%. While N300 billion worth of FGN bonds matured this week, FG sold N50.45 billion in this week’s FGN bond auction at stop rates of 13.5% for the 5year and 7year, while the 10year closed at 13.55%.