What To Expect From The Markets This Week - 211220


Saturday, December 19, 2020 08:00 AM / Proshare Content / Header Image Credit: EcoGraphics


Proshare Nigeria Pvt. Ltd.

Nigeria: Economic Dashboard @ 181220  

Proshare Nigeria Pvt. Ltd.

Editor's Note

Source: Proshare Research - December 19, 2020

Nigeria Economy

  • According to the National Bureau of Statistics, non-performing loans in the Nigerian banking sector declined by N42.4bn in three months. The total amount of non-performing loans in Nigerian banks declined from N1.21trn at the end of the second quarter of 2020 to N1.17trn as of Q3 2020. A breakdown of total credit by geographical distribution reveals that Lagos state beneficiaries recorded the highest credit by geographical distribution while Yobe beneficiaries received the least from a total loan of N19.46trn as of the end of Q3 2020.
  • Nigeria's capital importation as of Q3 2020 stood at $1.46bn, increasing by +12.86% from Q2 2020 and it declined by -74.03% compared to Q3 2019. The largest amount of capital importation by type was received through other investments and it accounted for 43.75% of total capital importation, while Foreign Direct Investment and Portfolio investment accounted for 28.38% and 27.87% of total capital importation respectively in Q3 2020.
  • Furthermore, Lagos State was the top destination of capital investment in Nigeria in Q3 2020 with $1.21bn, which accounted for 82.71% of the capital inflow in Q2 2020.
  • Nigeria's inflation rate surged by 14.89% (Y-o-Y) in November 2020, which is 0.66% points higher than the rate recorded in October 2020 (14.23%). While the food index rose sharply by 18.3% in November 2020 compared to 17.38% in October 2020, representing 0.92% points higher than the preceding month. The rise in the food index was caused by increases in prices of Bread and cereals, potatoes, yam & other tubers, meat, fish, fruits, vegetables, and oils & fats. Furthermore, core inflation which excludes the prices of volatile agricultural produce stood at 11.05% in November 2020, declined by 0.09% when compared with 11.14% recorded in October 2020. The highest increases were recorded in prices of passenger transport by air, medical services, hospital services, repair of furniture, passenger transport by road, maintenance and repair of personal transport equipment, vehicle spare parts, hairdressing salons & personal grooming establishments, pharmaceutical products, paramedical services, and motor cars.
  • The Senate passed the Finance Bill 2020. The bill seeks to amend 12 Acts which include the Capital Gains Tax Act, Companies Income Tax Act (CITA), Personal Income Tax Act, Tertiary Education Trust Fund (Establishment) Act, Customs & Excise Tariff, etc. (Consolidated) Act, and the Value Added Tax. Others are the Federal Inland Revenue Service (Establishment) Act, Nigeria Export Processing Zone Act, Oil & Gas Export Free Zone Act, Fiscal Responsibility Act, Companies and Allied Matters Act 2020, and the Public Procurement Act.
  • The World Bank approved Nigeria's request for a $1.5bn loan. The loan will focus on four areas of engagement namely investing in human capital, promoting jobs and economic transformation and diversification, enhancing resilience, and strengthening the foundations of the public sector. The $1.5bn loans are meant for two projects in Nigeria. The projects are Nigeria COVID-19 Action Recovery and Economic Stimulus - Program for Results (Nigeria CARES) and the State Fiscal Sustainability Program for Results (SFTAS) Additional Financing. Both projects will get a $750m facility through the International Development Association.
  • The Federation Accounts Allocation Committee shared a total of N601.1bn November 2020 Federation Account revenue to the federal, state & local governments and agencies. The total distributable revenue of N601.1bn comprised statutory revenue of N436.46bn, Value Added Tax revenue of N136.79bn, and augmentation of N7.86bn from the forex equalization revenue.


Global Economy

  • China's industrial output grew in November, expanding for the eight-straight month as the economic recovery gathered pace and global demand picked up. According to NBS, industrial output growth quickened to +7.0% in November from a year earlier. Retail sales rose +5% (Y-o-Y), auto sales grew by +11.8%, sales of household appliances grew by +5.1% in November, communications equipment sales spiked up by +43.6%. Fixed-asset investment rose +2.6% in January-November from the same period last year, faster than a +1.8% increase in the first 10 months of 2020. Private-sector fixed-asset investment, which accounts for 60% of total investment, rose +0.2% in January-November, compared with a -0.7% decline in the first 10 months of the year.
  • Japan's exports declined in November by -4.2%, largely due to weaker U.S and China-bound shipments and suggesting a slower pace of recovery. Japan's exports failed to match the strong recoveries seen in major Asian manufacturing rivals China and South Korea, which have benefited from the spike in the global demand for technology that enables remote working during the pandemic.
  • UK's unemployment rate rose to 4.9% in Q3 2020 and 5.2% in October alone. Over 800,000 jobs have been lost from payrolls since the pandemic began.
  • The Australian unemployment rate declined in November, a sign that massive monetary and fiscal stimulus was bearing fruit after it brought the coronavirus pandemic under the country. According to the Australian Bureau of Statistics (ABS), employment numbers increased by 90,000 in November, and the jobless rate eased to 6.8%. Australia's underutilization rate, which combines the unemployment and underemployment rates stood at 16.2%.
  • UK and US are in talks over a mini trade deal that could see punitive tariffs on Scottish whisky lowered. This talk comes after the UK recently announced that it would drop tariffs against the US over subsidies for aerospace firms. 

Proshare Nigeria Pvt. Ltd.

Commodities Market


Prices slid more than 1% on Monday, as OPEC lowered its oil demand forecast while production rises. OPEC now expects global oil demand to fall to 9.77m bpd in 2020 to reach 89.99m bpd this year, compared to over 90m bpd projected for its November Monthly Oil Market Report. Signs of rising supply also weighed on the market. Major European countries continued in lockdown mode to curb the spread of COVID-19, which has reduced fuel demand.


Oil hit a nine-month high on Thursday after government data showed a fall in U.S. crude stockpiles last week, while progress towards a U.S. coronavirus relief package deal and strong Asian demand lifted prices.


Brent had a weekly growth of +3.7% (See Table 1)



Gold prices inched up by +2.7%, extending their gains from the previous week. Silver rose by +8.4% W-o-W. (See Table 1)



Cocoa prices depreciated by -3.5% this week, making it the third week of successive losses.


Corn prices grew by +3.7% W-o-W while Sugar also depreciated by -0.07%. (See Table 1)


Table 1Weekly Change in Commodity Prices





Weekly Chg






































Source: Bloomberg, Proshare Research

*Data for 18th Dec 2020 is as of 4:41 pm (Nigerian Time)



  • In the coming week, Oil prices are expected to continue their upward trend as countries around the world continue to approve the use of vaccines. U.S. fiscal stimulus deal is also expected to help support prices.
  • Gold prices are expected to rise in the upcoming week, as the fiscal stimulus deal seems imminent, as the U.S. Fed pledged to keep interest rates low until an economic recovery is secure.
  • We expect cocoa prices to be stable, with crop prospects improving in Ivory Coast and further weakness in demand expected due to the COVID-19 pandemic.
  • Sugar prices to rise as Indian sugar exporters will try to quickly secure sales after the government approved a subsidy program for up to 6m tonnes earlier this week.
  • Corn prices to rise during the coming week, as China continues to drive the boom in U.S. corn sales and shipments.


Fixed Income and Money Market 


Money Market

For most of the trading session this week, money market rates were low as the week started with OMO bills repayment of N283bn. However, at the end of the week, there was an uptick in the rate as the open buy back (OBB)  and overnight (O/N) rates both closed the week at  4.50%.


We expect rates to stay at these levels for the coming week since the market doesn't foresee any significant outflow and any other liquidity shocks that may push rates up.


Treasury Bills Market

The Nigerian Treasury Bills (NTB) market started the week on a quiet note, in the week CBN auctioned an NTB offering N7bn worth of notes, the offer was oversubscribed by 17.3 times, although, investor demand was strongest in the 364-day tenor bill was oversubscribed by 31 times. The 91-day note was allotted at 0.05%, while 182-day and 364-day tenor were allotted 0.5% and 1.14% respectively. The NTB average yield closed the week at 0.41%.


Also, CBN conducted an OMO auction offering N60bn worth of notes, which was oversubscribed by 6 times. However, investor demand was strongest on the 362-day tenor bill which was oversubscribed by 7.5 times. 91-day, 180-day, and 362-day were allotted 1.65%, 4.50%, and 6.44% respectively. The NTB average yield closed the week at 0.47%.


We expect participation in the NTB market to remain quiet in the coming week as a result of the depressed and unattractive yields.


FGN Bond Market

The bond market started on a quiet note, this was as a result of a downward adjustment in the bond auction circular which was N20bn lower than last month of the re-opened 15 -year and 25-year tenor.


The DMO conducted a bond auction offering N60bn worth of bonds, however, what was allotted at the end of the auction was N30bn worth of bonds. Investor demand was strongest on the 15-year tenor which was oversubscribed by 3 times. The 15-year and 25-year papers were allotted at 6.95% and 7.05% respectively.


The FCMB commercial paper issuance has been suspended till further as announced by the management of the Bank.


We expect the market to continue in a quiet trend in the coming week.


FGN Eurobond Market

The FGN Eurobond market started the week on a quiet note as market participants traded cautiously with the rising number of coronavirus infections despite vaccine news remain positive.


We expect the market participants to continue to react to events around the global oil price and COVID-19 news.


Foreign Exchange Market

For weak-on-week (W-on-W) performance of the Naira, at the I&E FX window, the Naira appreciated against the USD by +0.25%, at the BDC market it appreciated by +1.04%.


The Naira closed the week at $/N394 at the I&E FX window, at the NAFEX (spot market) it closed at $/N390.85, and at the BDC market, it closed at $/N475, £/N630, and €/N577.


We expect the CBN to continue its FX management strategy in supporting the Naira at the parallel and I & E window.

Proshare Nigeria Pvt. Ltd.

Nigerian Capital Market

  • The Nigerian Bourse continued its bullish performance this week and the Performance of the exchange was supported by interest in tier 1 bankers and other bellwether stocks including the stocks in the Industrials sector. NSEASI advanced further by +7.46% to close above 35,000bpts while Market cap also advanced by N1.33trn; YTD return and market capitalization currently stand at +37.12% and N19.23trn, respectively WoW.

  • A total turnover of 1.893 billion shares worth N17.647 billion in 20,660 deals was traded this week by investors on the floor of the Exchange; the volume and value of stocks traded declined by -46.44% and -2.99% respectively. The most traded stocks by volume were JAIZBANK, FBNH, and NIGERINS accounting for 761.87 shares worth N1.46bn in  1,395 deals, contributing 40.25% and 8.32% to the total equity turnover volume and value respectively.

  • Performance across sectors was positive for the week as all indices closed the week advanced except the NSE-ASeM and NSEGROWTH which closed flat. NSE Insurance was the highest advancer for the week with an increase of +13.39%, Banking, NSE Consumer Goods,  NSE-IND, and NSE Oil & Gas advanced by +5.12, +3.08, +7.74%, and +1.34% respectively.

 Proshare Nigeria Pvt. Ltd.

Chart 1: Movement of NSEASI Index Points 14Dec. 2020 - 18Dec. 2020

Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.



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 at 722.82 points and N537.27bn showing a decline of -1.49% and -1.49% WoW respectively.


 Proshare Nigeria Pvt. Ltd.

Dangote and Toni Index 



Dangote Index closed the week positive at 111.57 basis points from 98.42 basis points recorded the previous week, an increase of +13.36% DANGSUGAR and DANGCEM recorded a decline in their share prices except for NASCON which closed negative with a decline of -9.38%. DANGCEM recorded the highest gain of +14.48% WoW.


Table 2: Dangote Index W-o-W Change

Proshare Nigeria Pvt. Ltd.



Furthermore, the Toni Index also closed negative to close at 99.93 basis points from 96.09 basis points recorded the previous week, a W-o-W growth of +4.00% All the stocks weighted under the Toni Index closed the week positive but TRANSCOHOT closed flat WoW.



Table 3: Toni Index W-o-W Change

Proshare Nigeria Pvt. Ltd.




With limited opportunities for high yields in other asset classes due to macroeconomic challenges and a high inflation rate environment, we expect the market to sustain the bullish momentum as investor sentiment and market breadth remained positive in the equities market.


Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

Contact Us:

To list your events, e-mail business@proshareng.comWhatsApp  0902-407-5284 and DM @proshare.

For further information, enquiry or clarifications, kindly email market@proshareng.com and research@proshareng.com Tel: 0700PROSHARE (070077674273). Call us NOW!


Follow @proshare @ecopoliticsNG @TheAnalystNG@PersonalFinanceNG and @WebTVng for coverage and updates.

Proshare Nigeria Pvt. Ltd.

Check out our Events Calendar for event details and follow us on WebTVAPP and Social Media for updates as the week unfolds. Yours to Serve!

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd. Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.  Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.  Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd. Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

Previous Week(s) Market Outlook

1.      What To Expect From The Markets This Week - 141220

2.     What To Expect From The Markets This Week - 071220

3.     What To Expect From The Markets This Week- 301120

4.     What To Expect From The Markets This Week - 161120

5.     What To Expect From The Markets This Week - 021120

Proshare Nigeria Pvt. Ltd.

Latest Reports This Past Week

1.      Covid Related Reports

2.     NBS Publishes COVID-19 Impact Monitoring Survey Report for October 2020

3.     Average Air Fare Increases by 18.47% YoY in November 2020 - NBS

4.     Capital Importation into Nigeria Stood At $1,461.49m in Q3 2020 - NBS

5.     Banking Sector Records 2.78bn Volume of Transaction in Q3 2020 - NBS

6.     FAAC Disburses N639.90bn in October 2020 - NBS

7.     GDP by Expenditure: Household Consumption Expenditure Contracts By -0.08% in Q2 2020 - NBS

Proshare Nigeria Pvt. Ltd.

Related News

1.      Investors Gain N1.33trn WoW as NSEASI Inches Up by 7.46% to Close the Week Positive

2.     Investors Gain N390.18bn as NSEASI Inches Up by 2.10%, Closes Above 36,000bpts

3.     Investors Gains N140.03bn as NSEASI Inches Up by 0.76%, Maintains Positive Market Sentiment

4.     Investors Gains N199.48bn as NSEASI Inches Up Further by 1.10%, Closes Above 35,000bpts

5.     Investors Gains N309.78bn as NSEASI Inches Up by 1.73% to Open the Week Positive

Proshare Nigeria Pvt. Ltd.

Read More - The Monthly Proshare CONFIDENTIAL  

1.      Banks in H1 2020: Imagining Beyond COVID-19

2.     NSE Ten Years After a Takeover: The Good, The Bad and Undecided

3.       NESG v CBN: Beyond the Battleground - The Need for Facts, Perspective and Resolution

4.     Roads: Concrete Vision, Asphalt Competition, Looking Ahead.     

5.     CEO Remuneration 2020 Report: Between 2019 and 2020; Understanding The New Realities

6.     Coronanomics (1) - Understanding the Realities of an Impending Recession

7.     NCM2020 - Fin. MKT in Transition: Understanding Past Uncertainties; Preparing for New Possibilities

8.     Banks' H1 2019 Numbers: Top Line Growth, Bottom Line Uncertainty

9.     CEO Remuneration: Making Sense Of The Numbers For Listed Companies In Nigeria

10.  Budget 2019: The Hidden Monsters

11.   Surviving Uncertain Times in the Nigerian Financial Market

12. The Rich, The Poor and Buharinomics

13.  Nigerian Banks' Performance - H1 2018

14.  AMCON and Financial Services Debt Burden in Nigeria

15.  Poverty Tracker and Nigeria: Raising The Red Flag

16.  POCKET Economics: Addressing Income Inequality

17.   The Silent Drug Epidemic: A Gathering Storm

18.  Judging IMF's Position on Development Indices

19.  Money Market: The Folk Road

20. The Headache of Missing Targets

21.  2018 Outlook on the Nigerian Economy: The Need for an Even Keel

22. Nigeria External Economy and the White Noise of Import Dependency

23. States and the Rising Weight of Debt

24. Money Supply: Reeling from Policy Response

25.  How Rail and Energy Will Deliver a Robust Economy for Nigeria

26. Too Big Government: The Hysteria of Developmental Quagmire

27.  The Nigerian Debt Conundrum and the Need for Automatic Stabilizers 

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

Related News