What To Expect From The Markets This Week - 130921


Saturday, September 11, 2021 08:00 AM / Proshare Content / Header Image Credit: EcoGraphics

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Nigeria: Economic Dashboard @ 100921 

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Editor's Note

Source: Proshare Research - September 11, 2021

Nigeria Economy

  • According to Data released by the National Bureau of Statistics in Abuja on Wednesday,Nigeria recorded a trade deficit of N1.87tn in the second quarter of the year.The Foreign Trade report for Q2 2021 further showed that crude oilexports grew by 111.32% from N1.93tn in Q1 2021 to N4.08tnin Q2 2021. The NBS data also revealed that crude exports constituted 80.29% of the country's total exports, which is larger than the 66.38 % contribution made in Q1 2021. 
  • At al private sector dialogue during the week, the Chief Executive Officer, Nigerian Economic Summit Group, Laoye Jaiyeola, urged state governments to improve on investment and create an enabling environment for domestic businesses to thrive as well as to attract investors into the country. Jaiyeola noted that the root cause Nigeria's economic woe sis the paucity of investment, arising from the lack of an enabling environment prepared for businesses to thrive. Also speaking at the event, Chairman, NESG, Asua Ighodalo, stressed the need for states to make themselves attractive to businesses in order to generatehigher tax income. 
  • During a one-day interactive session with organised labour and civil society, the Director, Corporate Communications Department, CBNdisclosed that currently, the bank has about 37 purpose-driven interventions that are functionally based, well-thought-out and born out of the critical issues within the economic space. The CBN Director admitted that the country is currently confronted with issues of insurgency, insecurity, issues of price adjustment in terms of powerall of which account for the high inflation. 
  • A Court of Appeal sitting in Abuja, on Friday, ordered both Rivers and Lagos States to maintain status quo on the collection of Value Added Tax, VAT, pending the determination of an appeal that was lodged before it by the Federal Inland Revenue Service, FIRS. By implication, the state government are to refrain from taking any action to give effect to the earlier judgement obtained from the Federal High Court.

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Global Economy

  • In a report to clients on Monday, Goldman Sachs Group economists revised down their year-end forecast for growth in the United States economy to 5.7% down from a year-end forecast of 6 % published at the end of last month. Goldman Sachs also cutprojection for the unemployment rate to 4.2 % at end of the year from a prior estimate of 4.1 %. 
  • According to recent US data, American employers added 235,000 jobs in August, well short of the 728,000 expected by economists - and down from just over a million in July. Analysts believe that the limit of the rapid economic recovery seen this year may have been reached, causing uncertainty about the next few months. 
  • According to US officials, State governments that intend to extend enhanced unemployment benefits can do so. The U.S. Congress had decided to end the jobless benefits program which provided a general stimulus package of up to $300 extra a week to millions of people who lost their jobs during the pandemic ended on Monday as the U.S. celebrated Labor Day. White House press secretary Jen Psaki said there are other options available for states to extend benefits to people in need. 
  • Vice governor of the People's Bank of China (PBOC) told a news conference on Tuesday that the room for monetary policy is still relatively large as it appears that China's economy is losing steam raising expectations of policy support sooner than later. The PBOC last lowered banks' reserve requirement ratio (RRR) in mid-July. Speaking at the same event, Sun Guofeng, head of the monetary policy department at the PBOC, said there is no big shortfall of base money, and liquidity supply and demand will remain basically balanced in coming months. 
  • According to the Indonesian central bank, Indonesia's foreign exchange reserves rose by US$7.5 billion in August to hit a record high of US$144.8 billion, boosted by the International Monetary Fund's Special Drawing Rights' (SDR) allocation, The Southeast Asian country got SDR equivalent to US$6.31 billion from the IMF, which the fund gave to support global economic stability amid the COVID-19 pandemic.The Bank stated that August reserve level was equal to 9.1 months of imports. 
  • According to the second-quarter GDP report released by South Africa National Statistics Agency on Tuesday. The continent's most industrialised country saw its gross domestic product (GDP) rise by 1.2 % in the second quarter of 2021, following a 1.0 % increase in the first quarter. Despite the gains made, the economy is 1.4 % smaller than before the coronavirus pandemic.

Summary and Outlook

Earlier this week, the National Bureau of Statistics (NBS) issued the Foreign Trade Report for Q2-2021. Overall trade rose by 88.7% y-o-y and 23% in Q2-2021. However, Nigeria's trade with Africa saw a reduction in spite of the AfCFTA which kicked in earlier in the year. This has raised posers among analysts many of whom believe that the country needs to do more to position itself to take advantage of the enormous opportunities in the continental trade agreement.


 Meanwhile, the legal tussle between the FIRS andgovernments of Lagos and Rivers states over the collection of VAT, has once again raised the issue of Fiscal federalism as operated in Nigeria. Analysts project that up to 30 states would experience severe revenue shocks if the pendulum swings in the favour of the litigating states. 

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Commodities Market

Weekly Review and Outlook



  • On Monday, the GMD of NNPC, Mele Kyari, said the earliest period the Corporation can issue its Initial Public Offer to investors is in the next three years (2024). According to him, "the NNPC may not be able to offer its shares to the public by 2022 or 2023 due to certain bottlenecks that had lingered over the years". Later in the week, he assured Nigerians that the corporation was working with relevant agencies to ensure that the price of gas is affordable by increasing the volume supplied to the domestic market.
  • The Minister of State for Petroleum Resources, Timipre Sylva, on Monday, called for the establishment of an Africa Energy Bank to help improve investments in the oil and gas sector in the continent as Nigeria hopes for huge investment with the passage of the Petroleum Industry Act.
  • The Minister of Industry, Trade, and Investment, OtunbaNiyi Adebayo, On Monday, disclosed that his ministry has inaugurated a technical committee to review the Petroleum Industry Act 2021 and its implications on some of the statutory responsibilities of his ministry such as the Oil and Gas Export Permit as well as the standards for Weights and Measures.
  • The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has confirmed Kogi State as an oil-producing state, to benefit from the 13% derivation fund.
  • The NNPC on Wednesday released its FY2020 Audited Financial Statements (AFS) which revealed a decline in revenue from N4.634trillion in 2019 to N3.718trillion to 2020 and surprisingly a surge in PAT from a loss position of N1.7billion in 2019 to a profit of N287bn in 2020.
  • According to the latest figure released by the Department of Petroleum Resources (DPR), Nigeria's crude oil production dropped to an average of 1.23 million b/d in August from 1.36 million b/d in January and 1.32 million b/d in July 2021, representing the lowest figure YTD.Analysts attributed this to the force majeure of Shell PDC on Forcados crude oil within the period. 

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  • Oil prices dropped by about $1 on Monday, extending previous losses after the world's top exporter Saudi Arabia slashed crude contract prices for Asia over the week ending September 11, reflecting well-supplied global markets and concerns over the outlook for demand.
  • Iraq and Total Energies have signed a $27billion contract to deepen oil, gas, and solar investment in Iraq. The Iraqi oil minister, Ihsan Abdul Jabbar, said the deal was also to reduce the country's dependence on fossil fuels.
  • The head of Russia's Lukoil Company said oil prices at $65-$75 were comfortable for the market and OPEC+ is striving to maintain that price range by regulating output.
  • Russia's Foreign Minister, Sergey Lavrov, on Monday, said the Nord Stream 2 natural gas pipeline from Russia to Germany is set to be completed in few days. While the US and many EU countries opposed the project, Germany has considered it mostly from a business perspective. Gazprom, the main facilitator of the project, on Friday said it has finished the construction of the Nord Stream 2 subsea pipeline to Germany, but flows are not yet cleared by the regulators.
  • OPEC+ at the first Ministerial Roundtable on Energy, Climate, and Sustainable Development canvassed for a different approach in tackling climate change in developing countries.
  • Oil prices grew towards $73 a barrel on Friday, supported by growing signs of supply tightness in the United States as a result of Hurricane Ida and as U.S.-China trade hopes gave riskier assets a boost.
  • Both Brent and WTI benchmarks had weekly decline (See Table 1)

Table 1: Weekly Change inCommodity Prices





Weekly Chg






































Source: Bloomberg, TheAnalyst

* Data for 10th September 2021 as at 5:12pm (Nigerian Time)


  • In the coming week, oil prices are expected to gain slightly as the US Gulf of Mexico production comes on stream and President Biden's vaccine mandate strengthens economic recovery. Oil prices may also be supported by the Chinese oil auction which was aimed at stabilising oil prices.
  • The oil market in the coming week will be looking out for OPEC and the International Energy Agency's oil demand outlook for 2022 against the spread or containment of the Delta variant of COVID-19.


Spot Prices of Commodities as of 18:12pm 03/09/2021





Weekly Chg






































 Source: CNBC, Proshare Research

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Fixed Income and Money Market 


Currency Market

The Naira continued its fall against major currencies this week, both at the BDC market and I & e FX Window.


At the I & E FX window, the domestic currency fell slightly by +0.12% on a week-on-week (W-o-W) basis to N412.00/US$ at the close of trading on Friday.


At the BDC market, it closed at US$/N547 depreciating by +3.60% against the US dollar, against the British pound it also fell by +3.47% to close at Pound/N745, and against the Euro by+2.58% to close at Euro/N635.


The Naira closed the week at $/N412.00 at the I&E FX window, at the NAFEX (spot market) it closed at $/N411.29


Average Benchmark Yields



% Change

I & E FX Window








BDC ($/N)




Source: FMDQ, AbokiFX, Proshare Research


Money Market

For most of the trading session this week, money market rates were in single digit, this was supported by robust system liquidity.


At the close of the session on Friday, funding rates increased which was propelled by PMA. Open Buyback (OBB) closed at 14.00% while Overnight (O/N) rates closed at 14.50% indicating a W-o-W rise of +7.69%for OBB and +7.14% for O/N rates.


Money Market Rate




% Change

OBB (%)




O/N (%)




Source: FMDQ, Proshare Research


Funding rates are expected to trade in double digits trend in the coming week in the absence of any inflow.


Treasury Bills Market

The bills market was largely bearish this week, with attention skewed towards the PMA that held in the week.


At the close of the market this week, average benchmark yields for T-bills rose by +6.54% to 4.91%,OMO bills were up by +1.64% W-o-W to close at 6.12% while CBN's special bills dipped by -2.23%.


Average Benchmark Yields



% Change

T. Bills (%)




OMO Bills (%)








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 FGN bond market sustained its mixed trend this week, with buying interest seen at the short and long-dated instruments, while investors went long for the mid-tenor notes.


The overall average benchmark yields closed at 8.26% for the week which fell slightly by W-o-W by -0.66%.


Average Benchmark Yields



% Change

Short Tenor (%)




Mid Tenor (%)




Long Tenor (%)




Source: FMDQ, Proshare Research


FGN Eurobond Market

The Eurobond market was relatively bearish for the entire week, with buying interests seen across the board.


Access Bank is set to issue a 5-year Fixed Rate USD Senior Unsecured Note.

The bank currently has a 5-year Eurobond which was issued on the 19th of October 2016. 

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Nigerian Capital Market

  • The Nigerian bourse closed the week on a negative note as performance was bearish. The NGXASI closed the week with a decline of -0.86%. The Nigerian Stock Exchange lost N176.75 bn, year-to-date return moderated to -3.35%, while the market capitalisation settled at N20.28trillion.
  • The volume and value of stocks traded on the exchange this week grew by +6.55% and +51.14% respectively.
  • Sectoral performance across sectors tracked was mixed this week as the NGX Oil and Gas was the highest gainer for the week with +2.28% while NGX Insurance was the highest loser with -3.39%. NGX Consumer Goods closed positive with +0.18%, NGX-IND remained flat while NGX Banking closed negative with -0.19.
  • Market breadth for the week closed negative with 25 gainers led by OANDO and FTNCOCOA as against 34 losers led by CORNERST and UPDC

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Chart 1: Movement of NSEASI Index Points 03Aug. 2021–10 Sep. 2021

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Source: NSE, Proshare Research


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The NASD OTC Security Index (NSI) and Market Capitalization closed the trading week with a negative movement in Market capitalization and NSI. The NSI and Market capitalization closed the week at737.87 points and N641.34 with a decline of -0.27% and -0.27% respectively.


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Dangote and Toni Index   

Dangote Index closed the week negative with 129.05 basis points from 129.10 basis points recorded the previous week, representing a decline of -0.04%.


DANGCEM and NASCON closed flat while DANGSUGAR recorded a decline of -0.85% W-o-W.



Table 1: Dangote Index W-o-W Change

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Furthermore, the Toni Index closed negative with 101.28 basis points from 102.15 basis points recorded the previous week, a W-o-W decline of -0.85%.


TRANSCOHOT, TRANSCORP, and UBA all closed the week negative with -3.29%, -3.19% and -1.94% respectively while AFRIPRUD, UBCAP closed the week positive with +2.40% and +8.99% respectively.


Table 2: Toni Index W-o-W Change

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In the coming week, we expect the weak trend to persist, pending further corporate actions from listed companies and other macroeconomic developments 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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