August 7, 2017/InvestmentOne Research
Trade ideas for the week
- We remain positive on both quality Banking and cement stocks on continued elevated interest rate regime and potential for increased government capex spending.
- While recent rally has seen valuation a bit stretched, we still see value on quality names highlighted in our top picks below given sustained buying interest by investors.
- We expect Consumer names earnings to see support from price hike and recent reforms in the FX market.
- Going into the new week, we expect ASI performance to see support from investors’ expectation of positive Q2 2017 earnings scorecards from Tier 1 banks.
- This, in addition, to sustained buying interest on account of recent reforms in the FX market as well as new PFA guideline which required increased investment allocation to equities bodes well for ASI performance.
- We however highlight the potential for profit-taking on the index given the gain recorded in the outgone week and moreso after the earnings season.
§ Hence, we advise investors to stick to quality names and maintain a medium to long term investment horizon.
Our Picks
- Dangcem, GTB, Zenith, UBA, Access, NB and Nestle
The week in review
§ ASI gained +1.52% w/w following buying interest on market heavy weight stocks.
- Bond yields closed flat w/w due to temporary closure of the bond market.
- NGN closed at N365 against the USD at the parallel market.
The week ahead
§ Inflow of c.N113bn OMO maturity expected on Thursday 10th August
§ NBS to publish Q2 2017 foreign trade in merchandise statistics.
§ Monthly FGN Saving bond auction for August to hold today
