What To Expect From The Markets This Week - 220221


Saturday, Febraury 20, 2021 07:40 AM / Proshare Content / Header Image Credit: EcoGraphics


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Nigeria: Economic Dashboard @ 190221 

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Editor's Note

Source: Proshare Research - February 20, 2021

Nigeria Economy

  • The Nigerian economy recorded a positive GDP growth rate of +0.11% (year-on-year) in Q4 2020 after two consecutive quarters of negative growth. Its 2020 full-year GDP growth rate stood at -1.92% which implies an exit from recession.

The surprise recovery was driven by the resumption in most business activities. The number of sectors that expanded increased from 14 in Q2 2020 to 21 in Q3 2020 and 29 in Q4 2020. The fourth quarter is typically the fastest-growing quarter in the year due to increased consumer spending during the festive period.

  • According to the NBS, Nigeria's consumer price index, (CPI) which measures inflation rose by 16.47% in January 2021, an increase of 0.71% points higher than the 15.75% recorded in December 2020. Furthermore, the report noted that food inflation rose to 20.57% in January 2021 from 19.56% in December 2020. The rise in the food index was attributed to increases in prices of bread and cereals, potatoes, yam & other tubers, meat, fruits, vegetables, fish, and oils & fats.

Core inflation which excludes the prices of volatile agricultural produce stood at 11.85% in January 2021, an increase of 0.48% from 11.37% recorded in December 2020. The highest increases were recorded in prices of passenger transport by air, medical services, hospital services, passenger transport by road, pharmaceutical products, paramedical services, repair of furniture, vehicle spare parts, motor cars, miscellaneous services relating to the dwelling, maintenance, and repair of personal transport equipment.

  • According to the document put together by the Bureau of Public Enterprises (BPE) and submitted to the National Assembly, the Federal Government plans to earn a total of N493.4bn from the sale or concession of about 36 of its assets across the country. Some of the assets up for sale or concession include the nation's refineries, the International Conference, Centre in Abuja, Yola Electricity Distribution Company, Zungeru Hydro Power, Tafawa Balewa Square, etc. The proceeds of the sales of the selected properties would be used to fund the year's budget. Properties were classified under energy assets, industries, and communication departments, as well as development institutions and natural resources.

  • The CBN in its latest monthly economic report for November 2020 noted that Deposit Money Banks and Merchant banks continued to access the standard facilities window to square liquidity positions in November 2020. Furthermore, it reported that the trend at the CBN standing facilities window showed more frequency at the Standing Deposit Facility window, compared with the Standing Lending Facility, due to the banking system liquidity surfeit.

Applicable rates for the Standing Lending Facility (SLF) and Standing Deposit Facility (SDF) stood at 12.5% and 4.5% respectively. The total request for the SLF granted from November 1-26, 2020 was N15.96bn, made up of N3.15bn direct SLF and N12.79bn Intraday Lending Facilities converted to overnight report.

Global Economy

  • According to the data by the US Commerce Department, retail sales increased by a seasonally adjusted +5.3% in January 2021 from a decline of -1.0% in December 2020. Retail sales rose by +7.4% from a year ago. Sales in January were led by motor vehicles, with receipts at auto dealerships accelerating +3.1%. Sales at clothing stores soared +5.0%. Consumers also stepped-up spending at restaurants and bars, boosting receipts +6.9%. Sales at restaurants and bars declined by -16.6% in January 2021 compared to January 2020.
  • The Japanese economy contracted by -4.8% in 2020, its first contraction since 2009. The Japanese economy grew by +3% in Q4 2020 lower than +5.3% growth in Q3 2020.
  • According to the UK's Office National Statistics, its consumer prices index rose to 0.7% in January 2021 from December 2020. The rise in inflation was driven by rising prices of frozen fish fingers, vegetables such as cauliflowers, and premium crisps. The biggest contribution was from furniture retailers and household goods stores, where there was less discounting of leather settees, double beds, and fitted sheets.
  • Ryanair lost its challenge to state aid for Air France and SAS after a European court ruled the support did not break state aid rules. The General Court of the European Union said the support by the French and Swedish governments amid the pandemic is legal. Airlines that hold a French license can defer payment of taxes, while airlines holding a Swedish operating license can take advantage of a loan guarantee scheme. Following the rulings, Ryanair announced that it will refer the matter to the Court of Justice of the EU.

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Commodities Market

Weekly Review and Outlook


  • Oil prices soared to their highest in about 13months on Monday as vaccine rollouts promised to revive demand and producers kept supply reined.
  • The rise continued Tuesday as a cold front shut wells and refineries in Texas, the biggest crude producing state in the United States, the world's biggest producer.
  • On Wednesday, oil prices appreciated once again as support from supply disruptions in the U.S. south caused by an Artic blast was offset by expectations that OPEC+ producers may ease their output curbs after April.
  • Oil prices slid by up to 2% in early trade on Friday, adding to overnight declines, on worries that refineries will take time to resume operations after the big freeze in the U.S. South, creating a gap in demand, while OPEC+ supplies were expected to rise.
  • Brent had a weekly growth of +3.54% (see Table 1).


  • Platinum prices surged past $1300/t.0z on Monday, February 15th, 2021, its highest since January 2015. The white metal which is used in catalytic converters that limit emissions from automobile engine exhaust systems has been on a sizzling run from the start of the year amid rising industrial demand and ongoing interest from investors. Enthusiasm is rife that a wider supply to demand gap could lead to higher platinum prices as the global economy rebounds.
  • Gold's bearishness continued Wednesday, with the yellow metal plunging three- months lows below $1800, as the dollar spiked on a brief surge in U.S. bond yields and equity markets turned red from profit-making and reallocation of funds.
  • Gold depreciated by -1.47%, while Silver also inched up by 1.74% W-o-W (see Table 1).


  • Cocoa prices declined by -0.24% this week.
  • Corn prices grew by 0.46% W-o-W while Sugar also appreciated by 7.33% (see Table 1).


Table 1Weekly Change in Commodity Prices





Weekly Chg






































Source: Bloomberg, Proshare Research

*Data for 19th Feb 2021 is as of 5:40 pm (Nigerian Time)



  •  In the coming week, oil prices are expected to be little changed as signs of power and overall energy situation starting to normalise in Texas. However, the lack of demand from Texan refiners will likely lead to builds in crude stocks.
  • Gold prices are expected to be choppy in the coming week, with higher bond yields and strengthening U.S. dollar expected to weigh on the yellow metal while expectations of a large U.S. stimulus package should drive prices up.
  • A poor demand driven by the COVID-19 pandemic is expected to keep cocoa prices on allow.
  • Sugar prices expected to be rise next week as Container tightness slows down India's sugar export.
  • Corn prices to be firm in the coming week, s the U.S. Department of Agriculture’s corn stock outlook came in higher than expected.

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Fixed Income and Money Market 


Money Market

For most of the trading session this week, money market rates were relatively lower. However, there was a marginal uptick in rates during the week which was supported by the OMO bill auction, and rates closed higher at the end of the week.


At the close of the trading session this week, Open Buyback (OBB) closed at 20.0% while Overnight (O/N) rates closed at 20.5% indicating a Week-on-Week (W-o-W) significant rise of +344.44% for OBB and +331.58% for O/N rates.

Money Market Rate




% Change










Source: FMDQ, Proshare Research

Rates are expected to continue to trend lower with the absence of any funding obligations.


Treasury Bills Market

The Nigerian Treasury Bills (NTB) market started the week on a bearish note as the average benchmark yield rose by 3bps to close at 1.46%.


At the close of the week, the average benchmark yields for the T-bills increased W-o-W by +2.03% to close at 1.51% while OMO bills also fell by -0.75% to close at 6.63%. Yields for the CBN Special Bill declined by +14.8% to close at 2.13% at the close of the week.


Average Benchmark Yields



% Change

T. Bills (%)




OMO Bills (%)








Source: FMDQ, Proshare Research


At the OMO auction today, the Apex bank offered and sold N180.00 billion worth of notes. The offer was over-subscribed across all tenors. The 89-day was oversubscribed by +163.40%, 180 and 362 days were oversubscribed by +172% and +150% respectively. The 89-day 187-day & 362-day notes were allotted at 7.00%, 8.50%, & 10.10% respectively. The stop rates were left unchanged from the previous OMO auction.




Stop Rates (%)

Amount Offered (N'bn)

Total Subscription (N'bn)

Amount Allotted (N'bn)

89 days





180 days





362 days






Dufil Prima Foods Plc opened its Series 3 and 4 commercial paper under its N30bn CP Issuance program which is scheduled to close on 26 February 2021. The tenor for the instrument is 182 days and 268 days with an implied yield at 4% and 5% respectively.


Also, FMDQ announced the admission of the Coronation Merchant Bank N1.29 billion Series 11 and N2.34 billion Series 12 CP under its N100.00 billion CP Issuance Programme on its platform.


Participation in the NTB market is expected to be bearish as rates are starting to pick up.


FGN Bond Market

The overall trading session for the FGN Bond market for the week was bearish, howbeit with minimum aggression as attention was on the February bond auctioned by DMO.


Overall average benchmark yields closed at 5.29% for the week which increased W-o-W by +4.34% with sell interest seen across all tenors.


Average Benchmark Yields



% Change

Short Tenor (%)




Mid Tenor (%)




Long Tenor (%)




Source: FMDQ, Proshare Research


DMO allotted N80.55bn of the N150bn offered, 10-year and 15-year were oversubscribed while the 25-year instrument was undersubscribed. The 10-year bond was oversubscribed by +54.10%, the 15-year bond was oversubscribed by +44.66% while the 25-year bond was undersubscribed by -19.74%.

February Bond Auction Result


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We expect the market to trend on a quiet note as investors await the February bond auction.


FGN Eurobond Market

Overall activity in the FGN Eurobond market was quiet, with soft buying interest seen across the board at the beginning of the week.  However, activity picked up at the end of the week with buying interest seen across the board, this was supported by an uptick in the crude oil prices. Average benchmark yields fell by 5bps to 5.53%.


We expect the market to continue to react to the news both on the domestic level and international level especially to movement in crude oil prices.


Foreign Exchange Market

It was a bearish market for the Naira this week against the US Dollar and at the different windows both at the official window and parallel market. The Naira declined W-o-W by -1.32% against the USD at the I & E FX window, for the BDC market it also declined by -0.21%.


The Naira closed the week at $/N410 at the I&E FX window, at the NAFEX (spot market) it closed at $/N408.25, and at the BDC market, it closed at $/N476, £/N656, and Euros/N573. 

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Nigerian Capital Market

  • The Nigerian bourse closed the week negative as Investor Sentiment was mixed on the equities market with a decline of -0.63%. The Nigerian Stock Exchange shed N130.02bn in Market capitalization W-o-W while YTD return and market capitalization currently stand at +49.72% and N21.03trn.

  • The volume and value of stocks traded on the exchange this week dipped by -22.20% and -44.03% respectively.

  • Performance across sectors was mixed this week as the NSE Oil and Gas was the highest gainer for the week with a gain of 4.60% while NSE Insurance was the highest loser with -1.67%. NSE Banking advanced by +0.54%, NSE-IND, NSE-30, NSE Consumer goods, dipped this week by -0.72%, -0.90%, and -1.04% respectively.

  • Market breadth was negative for the week with 39 gainers led by PORTPAINT  and JBERGER  as against 33 losers led by CHIPLC and ROYALEX.

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Chart 1: Movement of NSEASI Index Points 12 Feb.2021– 19 Feb.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 at 717.43 points and N514.76bn with a decline of -2.50% and -2.50% respectively.



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Dangote and Toni Index 


Dangote Index closed the week negative at 117.08 basis points from 117.34 basis points recorded the previous week, a decline of -0.22%. NASCON and DANGSUGAR recorded a decline in share price by -0.93% and -3.65% respectively while DANGCEM closed flat WoW. DANGSUGAR recorded the highest decline W-o-W.


Table 2: Dangote Index W-o-W Change

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Furthermore, the Toni Index closed positive at 102.25 basis points from 100.27 basis points recorded the previous week, a W-o-W growth of +1.97%UBA, UBCAP, and AFRIPRUD all closed the week positive with +1.22%, +12.39%, and +9.94% respectively, TRANSCORP closed negative with -3.09% while TRANSCOHOT closed flat WoW. 


Table 3: Toni Index W-o-W Change

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Given the bearish sentiment and breadth on the market this week and a likelihood of yields improving in the fixed income market we expect the current trend to continue in the coming week.


Also, we expect astute investors to take positions in dividend-paying stocks as companies release their full-year 2020 corporate earnings.

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