Despite largely positive earnings across major banking names that have released FY’17 results so far, the banking sector (835bps down) recorded sizable losses last week, pulling the NSE ASI 3% lower w/w. More specifically, DIAMONDBNK (-15%), UBA (-14%), ZENITHBANK (-11%), ACCESS (-10%), FCMB (-7%) and GUARANTY (-6%) declined substantially. We believe the downward trend was spurred by investors taking profit and selling to the strength of the market following the earnings releases. Going into the new week, we expect sell pressure to remain visible in the banking space, given the volumes on the offer cart at last week’s close. That said, we expect the selling to taper off as the week proceeds as investors take advantage of more attractive prices and noting that fundamentals of the Nigerian banking sector remain appealing.


The Nigerian equity market rounded off last week on a negative note, losing 285bps last week to trim YTD returns to 9.7%. With sell pressure persisting at session close, we believe weak sentiment will filter into trading today. However, we note that renewed interest in beaten-down stock prices in addition to more positive earnings releases could improve market sentiment.

Stock Watch:

STANBIC released its FY’17 results with top and bottom line up 36% y/y and 7% y/y – coming in close in line with our expectation at ₦212 billion and ₦48 billion. The Group proposed a total dividend of ₦1.10 (2016: ₦0.05; Vetiva: ₦1.04). The stock currently trades at a price of ₦50.00 and has returned 20% YTD.

Fixed Income:

We foresee continued CBN liquidity mop-up restraining demand in the fixed income market today. Meanwhile, the Debt Management Office will offer ₦70 billion across the 5-year, 10-year bond, and a new 7-year bond at the March bond auction Wednesday. This is lower than the ₦100 billion offered at the February auction.