The Week from the rear view;

The Central Bank of Nigeria released its September Purchasers Managers Index, with the Manufacturing PMI at 55%, above 50% for the 7^th month in a row. The key indicators on the Manufacturing PMI, Production Level, New Orders, Supply Delivery time, Employment level and Raw material levels all rose above 50%.
Non-Manufacturing PMI, at 55.3% has also risen for the 6^th consecutive month.
The Nigerian Stock Exchange closed the month of October on a positive note, gaining 3.5%. This is the first positive gain for October since 2013. The index is up 37.45%, one of the highest in the world.
The index also started the month of November with a romp closing at 1.31%
The earnings season is over for now as investors look forward to the next instalment in February of 2018.
Last week, the President sent a letter to the national assembly informing them of his intention to present the 2018 budget on Tuesday. There was a reported uproar in the house as members asked about the 2017 budget which is no were close to being implemented as requested.
Brent Crude Price crossed $60 last week and remained above this price by Friday as global crude oil demand outweigh supply. The Niger Delta militants perhaps watching this closely, also announced plans to restart bombings if its demands are not met. They want a larger control of the natural resources. Some claim this is election related.
Bitcoins price hit an all time high last week crossing $7,500. The so-called burst some have predicted appears not to be happening anytime soon.

Outlook for the week

Markets

The Stock Market rally that ensued last week is likely to continue as investors divert funds into the capital market from the fixed income markets. Treasury Bills yield have started dropping so investors will look to the market for yields.
News that oil prices is rising as well as the recent addition of Nigeria in the MSCI index is also a positive sign for most investors and is likely influencing the bullish ride.
Just to add that November has typically been bad for stocks, having closed negatively every year since 2014. But October was like that too and still closed positively.
Two major offers are likely to debut this week. The Flour Mills rights issue and the Lafarge rights issue. They intend to raise a combined N200b from the capital market.
The Debt Management Office will issue for sale its FGN Savings Bonds for the month on the 6^th of November (Monday). The offer will close on Friday the 10^th. Interest rates are typically, between 10%-13%.
Investors in bitcoins should expect prices to continue rising this week. It’s the best asset this year and looks likely to hit $10k by January. Nigerians looking to invest in bitcoins and other cryptocurrencies can do so from the comfort of their homes.
Diamond Bank confirmed on Friday that it is divesting its 97.7% ownership of its investment in Diamond SA. This is part of their plans to exit from its foreign operations and focus on the local market. They also own, Diamond Bank UK.

Stocks to watch this week

Diamond Bank – Sell pressure following sting of negative news.
Dangote Flour – Looks bullish as investors pour in following its return to positive retained earnings. Whatever it is Dangote is doing here is astonishing.
Stanbic – When will the ride end. For now, it’s no stopping them
Zenith Bank shares at trading at 5x looks quite cheap compared to GTB at 8x earnings. Zenith should be trading at 7x earnings

Macro-Economic Outlook

It is a busy week for the NBS this week as they plan the release of several interesting reports.
Some of the reports we are keen on seeing are the household expenditure report for the 3^rd quarter of 2017. The social statistics report for 2016 is also expected this week.
Others are E-payment channels, electricity statistics and railway data.
The exchange rate is likely to remain at N360 as the CBN’s external reserves strengthen.
There are a few publications still expected from the CBN and we won’t be surprised to get their much awaited 2016 annual report.

World view

The US have a new Federal Reserve Chair. President Trump named Jeff Powell, a non-economist, as his choice, removing the democrat Janet Yellen. The markets seem to like this and reacted positively. This perhaps is good news for Nigeria as it means the FED is likely to do all it can to keep global market positive.
Oil prices? Well, with the slew of corruption charges against billionaires in Saudi, resignation of Lebanon Prime Minister Hariri and the tough rhetoric coming out of the middle east, oil price is more likely to rise than drop
Donald Trump is also in the Asia and one can trust him to spook the region with one of his trademark tweets.
We still have one eye at events in the Niger Delta and hope it doesn’t get out of hand. We need to ride this wave.