Domestic Macroeconomy: Declining Crude Oil Production amidst the Battle for the Soul of the Naira… Is Nigeria Turning the Corner Soon?
This week, we spotlight the April 2024 edition of the OPEC Monthly Oil Market Report (MOMR) and CBN’s new circular on the usage of foreign currency (FCY) as collateral for Naira loans as both have the potential to impact Nigeria’s quest for a near term fiscal reinvigoration and exchange rate stability. To start with, the OPEC MOMR published on Thursday revealed that Nigeria’s daily average crude oil production (excluding condensate) declined by 91,000bpd to 1.23mbpd in March, marking its second consecutive monthly decline since reaching a 24-month peak of 1.43mbpd in January. Comparatively, OPEC’s total daily average output has remained on the increase since the start of the year, reaching 26.61mbpd in March from 26.38 and 26.60mbpd in January and February respectively…
Global Equities Market: Mixed CPI and Corporate Earnings Drag Performance
This week, the release of mixed CPI data across major markets alongside uninspiring earnings forecast by a major blue chip company contributed to the downbeat performance of the MSCI World equities index (down 0.4% w/w). In the US, disappointing headline inflation rate print for March (3.5% vs 3.2% in February) spooked investors. Additionally, underwhelming net interest guidance by JPMorgan, which was unchanged from 2023 performance, weighed on outlook for banks…
Domestic Equities Market: Banking Stocks Drag Performance… ASI down 1.1% w/w
Persistent selloff on banking stocks dragged the equities market to its fourth consecutive weekly loss following an extended holiday. As a result, the NGX-ASI tanked by 1.1% w/w to 102,314.56 points, with market capitalisation declining by 1.1% (-₦632.9bn) to ₦57.9tn. Consequently, YTD return trimmed down to 36.8% (previously 38.3%). In terms of activity, the average volume and value traded fell 46.7% and 14.3% to 489.9m units and ₦12.4bn respectively…
Foreign Exchange Market: Heightened Middle East Crisis Pushes Oil Price to 6-Month High
Brent benchmark crude Oil price increased 0.5% w/w to settle at $90.71/bbl, following heightened tensions in the Middle East as Israel is reportedly threatening an assault on Iran over allegation of providing support to Hamas…
Money Market: Bullish Outing in the Secondary Market
This week, system liquidity closed at ₦258.7bn, 13.6% lower than the previous week due to primary market sales worth ₦951.8bn and a 49.6% decline in the opening balances of banks to ₦163.0bn. As a result, OPR and OVN rates rose 7.7ppts and 7.1ppts respectively to 29.7% and 30.1%…
Bonds Market: Mixed Performance Emerges as Activity Dampens
Activity in the bonds market was mellow this week, due to the three-day public holiday issued by the Federal Government to celebrate the Eid. Performance at the beginning of the week was positive prior to the public holidays, however, there was a negative showing on Friday, bringing the average yield slightly higher by 11bps w/w to 19.0%.
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