The National Bureau of Statistics released Q1’18 GDP for Nigeria, showing that the economy expanded 2.0% y/y in the period, compared to -0.9% y/y and 2.1% y/y in Q1’17 and Q4’17 respectively. This performance came in behind Vetiva (3.4%) and Consensus (2.6%) estimates.

Following an initial surge in market activity at the start of the year (January daily average: ₦8.9 billion), trading turnover has moderated in recent months, falling from a daily average of ₦6.9 billion in Q1’18 to ₦5.0 billion so far in May. The decline in market activity has come amid cooling market sentiment and increased risk aversion after the initial January rally (market closed 16% higher in January) and ahead of the 2019 elections. Furthermore, we note that domestic investors have not provided the expected support in the market as the implementation of Pension Commission multi-fund guidelines has stalled. Given all this, we do not expect trading activity to pick up significantly in the near term as investors continue to monitor political developments.

Equity: After a largely bearish session on Friday (-44bps), the ASI closed last week 134bps in the red, its third consecutive w/w decline. Notably, all key sectors closed lower on Friday. With sentiment still largely bearish at the end of last week, we expect the market to open on a negative note today.

Stock Watch: After a 10-session rally which saw CCNN rise 48% to a five-year high of ₦29.00, trading in the cement manufacturer took a turn, with the stock declining 17% over the past three sessions. The stock currently trades at ₦24.00 and has returned 153% ytd, making it the best performing stock on the exchange.

Fixed Income: Ahead of the MPC decision on Tuesday, we expect cautious trading across the Fixed Income market today. Also, the DMO will be conducting a bond auction on Wednesday at which ₦70 billion will be offered on the 5-yr, 7-yr, and 10-yr bonds.

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