Speaking over the weekend, Dr Yemi Kale, the Statistician-General of the Federation hinted at a flat GDP growth for Nigeria in Q2’18, citing the challenges in the agriculture sector as a potential impediment to nearterm growth. The National Bureau of Statistics is scheduled to release Q2’18 GDP figures at the start of next week and we forecast year-onyear growth of 1.6% during the period, down from 2.0% in Q1’18. One driver of this material decline is the moderation in oil production observed in the quarter, with initial estimates suggesting a decline of c.150,000 bpd. On the back of this, we expect flat y/y GDP growth in the oil sector in Q2’18. Meanwhile, although the manufacturing sector should have posted a decent performance — helped by a low base and stable foreign exchange — the heavyweight services sector is likely to have remained weak.
Equity:
After posting ten straight negative closes, the ASI recorded a 187bps rebound on Friday following a strong recovery in Industrial Goods. This gain was, however, unable to offset earlier losses with the index recording a 51bps w/w loss. Despite the DANGCEM-driven recovery witnessed on Friday, we foresee a return to negative territory this week given that underlying investor apathy remains in the market. Nonetheless, we expect milder losses today.
Stock Watch:
UBA is one of the last Tier 1 banking institutions yet to release their H1’18 financial statements. The stock lost for four straight sessions last week to settle at ₦8.35, bringing the stock to a YTD loss of 19%.
Fixed Income:
Despite healthy system liquidity, demand in the fixed income market was weak last week amid wider emerging market weakness. As the global and political landscape remains unchanged, we anticipate a tepid start to this week’s trading.
