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What To Expect From The Markets This Week – 221121 – Proshare Nigeria Limited

Saturday, November 20, 2021 06:30 AM / Proshare Content / Header Image Credit: EcoGraphics


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Nigeria: Economic Dashboard 191121 








Editor’s Note

Source: Proshare Research – November 20, 2021
Nigeria Economy

Global Economy



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Summary and Outlook



In the week, the National Bureau of Statistics released data on Nigeria’s real GDP growth and Inflation. The release of the two lagging macroeconomic indicators sets the tone for deliberations at the forthcoming Monetary Policy Committee meeting which would hold between the 21st-22nd of November 2021. Real GDP grew by +4.03% in the third quarter largely on the back of a 49.65% contribution from the services sector, where financial and Insurance services recovering from a -2.48% contraction in Q2, to grow y-o-y by +23.23%. Notably, Oil production dropped from 1.61mbpd in Q2 to1.57mbpd in the third quarter, resulting in a -10.56% decline in the output from the Mining Sector. Although, still being supported by the low base effect, the growth figures as well as those of Inflation which declined in October by 63basis points to 15.99% would disincline the MPC from altering its centrist stance.


Commodities Market
Weekly Review and Outlook
Energy
Domestic

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Foreign

Metals
Gold depreciated by -0.22% while Silver also dipped by -1.38% W-o-W (see Table 1).


Agriculture

 
Table 1Weekly Change in Commodity Prices
Commodity
19-Nov-21
12-Nov-21
31-Dec-20
Weekly Chg
YTD Chg
Brent
78.11
82.3
51.8
-5.09%
50.79%
Gold
1860.2
1864.3
1898.67
-0.22%
-2.03%
Silver
24.96
25.31
26.4011
-1.38%
-5.46%
Cocoa
2582
2522
2597
2.38%
-0.58%
Corn
571.25
572.75
484
-0.26%
18.03%
Sugar
19.98
19.88
15.28
0.50%
30.76%
Source: CNBC, Proshare Research
*Data for 19th November 2021 is as of 6:01pm (Nigerian Time)
 
Outlook

Fixed Income and Money Market 

Currency Market
The Naira started the week on a quiet note, closing flat at against the US dollar for most of the trading session at the I & E FX window.
 
The Naira closed at N414.10/US$ on Friday, indicating a week-on-week (W-on-W) appreciation of the Naira. At the Nigerian Autonomous Foreign Exchange Fixing (NAFEX) window it also depreciated by -0.17%.
 
Average Benchmark Yields
12-Nov-2021
19-Nov-2021
% Change
I & E FX Window
415.10
414.4
-0.17%
NAFEX ($/N)
413.79
413.09
-0.17%
Source: FMDQ, Proshare Research
 
Money Market
System liquidity was relatively elevated for most of the week, but rates traded at double-digit trend.
 
At the close of the trading on Friday, open buy-back (OBB) and overnight rates (O/N) settled at 19.00% and 20.00% respectively indicating a W-o-W rise of +31.03% and +31.15% for OBB and O/N.


Money Market Rate
 
12-Nov-2021
19-Nov-2021
% Change
OBB (%)
14.50
19.00
+31.03%
O/N (%)
15.25
20.00
+31.15%
 














Source: FMDQ, Proshare Research


We expect rates to hover around current levels barring any inflows from the Apex bank.
 
Treasury Bills Market
The treasury bills market started the week on a quiet note, but activity picked up later into the mid-week.
 
At the close of trading on Friday, the market was bullish with selling interest seen across all maturities. Average benchmark yield for T. Bills fell by -1.62%, yields on OMO bills fell by -2.48% while yields on CBN’s special bills dipped by -1.02%
 
Average Benchmark Yields
12-Nov-2021
19-Nov-2021
% Change
T. Bills (%)
5.19
5.11
-1.62%
OMO Bills (%)
5.62
5.48
-2.48%
SPEB
4.90
4.85
-1.02%
Source: FMDQ, Proshare Research
 

We expect activity next week to be dictated by the market liquidity situation. 




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FGN Bond Market
The local bond market sustained a mixed sentiment this week, with most of the selling concentrated at the mid end of the curve.
 
At the close of trading on Friday, the market closed on a mixed note. Overall average benchmark yields closed at 8.44% indicating a W-on-W rise of +1.53%.
 
Average Benchmark Yields
12-Nov-2021
19-Nov-2021
% Change
Short Tenor (%)
5.27
5.37
+1.90%
Mid Tenor (%)
8.88
8.85
-0.33%
Long Tenor (%)
12.16
12.24
+0.64%
Source: FMDQ, Proshare Research 
 
FGN Eurobond Market
The Eurobond market started the week on a relatively bullish note, as attractive yield levels trigger some interests which was not sustained throughout the week.
 

At the close of trading on Friday, average benchmark yields settled at 6.69% indicating a W-on-W increase of +1.36%.





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Nigerian Capital Market

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Chart 1: Movement of NSEASI Index Points 12 Nov. 2021- 19 Nov. 2021
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Source: NSE, Proshare Research

 

NASD OTC  
The NASD OTC Security Index (NSI) and Market Capitalization closed the trading week with a negative movement in Market capitalization and NSI. The NSI closed the week positive with 745.65 points representing a downtick of 1.52% while the Market capitalization closed the week positive with a downtick of -1.52% to N616.04bn.


 

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Dangote and Toni Index   
Dangote Index closed the week negative with 146.17 basis points from 146.27 basis points recorded the previous week, representing a decline of -0.07%.

DANGSUGAR recorded a decline of 1.75%, while DANGCEM and NASCON remained flat W-o-W.

 
Table 1: Dangote Index W-o-W Change

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Furthermore, the Toni Index closed negative with 110.30 basis points from 112.91 basis points recorded the previous week, a W-o-W decline of -2.31%.

 TRANSCORP and UBA declined by -3.85% and -2.96% while AFRIPRUD, TRANSCOHOT and UBCAP  remained flat W-o-W
 
Table 2: Toni Index W-o-W Change

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Outlook 
In the coming week, we expect the activities of profit takers to collude with bargain hunters on the bourse. Other macroeconomic developments are also likely to impact investors’ decisions.
 

In addition, we expect investors to monitor the movement of yields in the fixed income market.




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Previous Week(s) Market Outlook
1.      What To Expect From The Markets This Week – 151121
2.     What To Expect From The Markets This Week – 081121
3.     What To Expect From The Markets This Week – 011121
4.     What To Expect From The Markets This Week – 251021

5.     What To Expect From The Markets This Week – 181021


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