What To Expect From The Markets This Week - 220321


Saturday, March 20, 2021 07:50 AM / Proshare Content / Header Image Credit: EcoGraphics


Nigeria: Economic Dashboard @ 190321 

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Editor's Note

Source: Proshare Research - March 20, 2021

Nigeria Economy

  • Nigeria's inflation rate rose to the highest in four years in February 2021. Nigeria's inflation rate rose to 17.33% in February 2021, from 16.47% in January 2021. On a month-on-month basis, the headline index increased by 1.54% in February 2021, which is 0.05% point higher than the rate recorded in January 2021 (1.49%). Increases were recorded in all COICOP divisions that yielded the headline index. Food inflation rose to 21.79% in February 2021 from 20.57% recorded in the previous month. The rise in the food index was caused by increases in prices of bread and cereals, potatoes, yam and other tubers, meat, food products, fruits, vegetables, fish and oils, and fats.

Core inflation rose to 12.38% in February 2021 from 11.85% recorded in January 2021, an increase of 0.53% points. The highest increases were recorded in prices of passenger transport by air, medical services, miscellaneous services relating to the dwelling, hospital services, passenger transport by road, pharmaceutical products, paramedical services, repair of furniture, vehicle spare parts, maintenance and repair of personal transport equipment, motor cars, dental services and hairdressing salons, and personal grooming establishments.

  • According to NBS, Nigeria's unemployment rate rose from 27.1% in Q2 2020 to 33.3% in Q4 2020 while its underemployment rate declined from 28.6% in Q2 2020 to 22.8% in Q4 2020. The NBS noted that unemployment was highest for persons in the labour force between the ages of 15-24 with 53.4% and 25-34 with 37.0%. Furthermore, it noted there were more unemployed and underemployed women in Q4 2020. Female unemployment was highest among the genders with 35.2% in Q4 2020 while the male gender was 31.8% during the same period. Similarly, 24.2% of women were underemployed while 21.8% of males were underemployed in Q4 2020.

  • Following the threats of the Mobile Network Operators to withdraw their USSD services to the Deposit Money Banks due to disagreement concerning the appropriate USSD model for financial transactions, which resulted in a debt of over N42bn, the Central Bank of Nigeria and the Nigerian Communications announced that Unstructured Supplementary Service Data services for financial transactions will be charged at a flat-rate fee of N6.98 per transaction. Furthermore, it was noted that N6.98 financial transaction conducted at Deposit Money Banks and all CBN-licensed institutions would replace the current per session billing structure, ensuring a cheaper average cost for customers to enhance financial inclusion. They also decided that the new USSD charges would be collected on behalf of the Mobile Network Operators directly from customers' bank accounts, promote transparency in its administration.

  • Telecoms data for Q2020 reflected that a total of 204,601,313 subscribers were active on voice as against 205,252,058 in Q3 2020. This represented a -0.32% decrease in voice subscriptions Q-o-Q. Similarly, a total of 154.301,195 subscribers were active on the internet as against 151,512,122 in Q3 2020. This represented a +1.84% growth in internet subscriptions Q-0-Q. Lagos State has the highest number of subscribers in terms of active voice per State in Q4 2020 and is closely followed by Kano and Ogun States respectively while Bayelsa and Ebonyi States have the least number of subscribers. Similarly, Lagos State has the highest number of subscribers in terms of active internet per State in Q4 2020 and is closely followed by Kano and Ogun States respectively while Bayelsa and Ebonyi States have the least number of subscribers. MTN has the highest share of subscriptions closely followed by AIRTEL, GLO and EMTS, respectively.

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Global Economy

  • The Federal Reserve officials took a dovish stance in March's FOMC meeting, signalling that interest rates are likely to remain unchanged until 2024, despite a significant upgrade to US growth forecasts. The Fed increased its US growth expectations for the year to +6.5% from the +4.2% forecast in December, which would mark the fastest economic expansion since 1984, on the back of fiscal stimulus and an accelerating vaccine rollout. Furthermore, they expect unemployment to decline from 6% to 3.5% by 2023, while core personal consumption expenditure inflation is expected to rise beyond the 2% target to 2.2% this year, before declining back down to 2% in 2022 and 2.1% in 2023.

  • U.S. consumer prices increased significantly in February as the cost of gasoline rose further, leading to the biggest annual gain in a year, but underlying inflation remained tepid amid sluggish demand for services like airline travel. The Labour department noted that its Consumer Price Index increased 0.4% last month after rising 0.3% in January. In the 12 months through February, the CPI gained 1.7%, the largest since February 2020, after climbing 1.4% in the 12 months through January.

  • Trade between Great Britain and the Republic of Ireland in January declined by 65% following the end of free movement of goods because of Brexit. New customs, export and health certification of requirements caused a major disruption to the free flow of cargo from Britain to Ireland.

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Commodities Market

Weekly Review and Outlook


  • Earlier in the week, the Federal Executive Council approved $1.5bn for the rehabilitation of the Port Harcourt Refinery
  • Nigeria's daily oil production rises to 1.42m barrels per day in February. OPEC, in its monthly oil report for March, said the country's oil production rose by 63,000 barrels.
  • Oil prices edged lower on Monday, pulling back from early gains fostered on strong Chinese economic news and ongoing supply restraint from major oil producers.
  • Oil prices fell for a third day on Tuesday, as Germany, France, and other European states suspended the use of a major coronavirus vaccine, threatening the recovery of fuel demand.
  • The drop continued on Wednesday, prices weighed down by expectations of weaker demand in Europe and by rising U.S. crude inventories.
  • Oil prices plunged for the fifth day in a row on Thursday, posting their biggest-one-day declines since last summer on growing worries about rising COVID-19 cases in Europe and the strengthening U.S. dollar.
  • Brent had a weekly decline of -8.1% (see Table 1).


  • On Wednesday, the Federal Government of Nigeria discovered gold deposits along the Abuja, Nasarawa axis through the National Integrated Mineral Exploration Project being undertaken by the Federal Ministry of Mines and Steel Development.

  • Gold appreciated by 1.2%, while Silver also grew by 1.51%W-o-W (see Table 1).


  • Cocoa prices declined by -3.19% this week.
  • Corn prices inched up by 2.96% W-o-W while Sugar declined by -2.79% (see Table 1 below).


Table 1Weekly Change in Commodity Prices





Weekly Chg






































Source: Bloomberg, Proshare Research

*Data for 19th Mar 2021 is as of 5:22 pm (Nigerian Time)



  • In the coming week, oil prices are expected to be mixed as European nations resume the use of the AstraZeneca Covid vaccine after the regulator signed off. Gains are expected to be capped as several large European economies reimpose lockdowns as caseloads rise.
  • Gold prices are expected to be mixed too in the coming week, as the rise in bond yields is expected to weigh on demand for bullion although its role as a hedge against inflation will likely provide some support to prices.
  • Cocoa surplus and pandemic conditions to depress prices in the coming week.
  • Sugar prices are expected to dip next week due to the lack of demand and oversupply.
  • Corn prices are expected to rise in the coming week on strong export demand.

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Fixed Income and Money Market 


Money Market

The overall funding rates for the week traded lower at the start of the week and closed higher at the end of the week. This was supported by funding obligation, that is FX auction by the CBN to market operators.


At the close of the trading session this week, Open Buyback (OBB) closed at 25% while Overnight (O/N) rates closed at 25.50% indicating a Week-on-Week (W-o-W) significant increase of +87.55% for OBB and +79.79% for O/N rates.


Money Market Rate




% Change









Source: FMDQ, Proshare Research


Rates are expected to continue to trend in double-digit supported by a decline in system liquidity.


Treasury Bills Market

The overall trading session for the Nigerian Treasury Bills (NTB) market picked up this week, with selling pressure seen across the tenors in the week, this is attributed to a further uptick in the yields auctioned out by the CBN especially at the long end of the curve.


At the close of the week, there was a significant uptick in average benchmark yields for the T-bills it increased W-o-W by +22.97% to close at 3.48% and OMO bills yields fell by -2.95% to close at 6.59%. Yield for CBN's Special bills also saw a significant uptick of +18.52% W-o-W.


Average Benchmark Yields



% Change

T. Bills (%)




OMO Bills (%)








Source: FMDQ, Proshare Research


The Central Bank sold N61.89bn worth of notes against N47.07bn offered at its NTB auction. The offer was oversubscribed across all tenors. The 91-day was oversubscribed by +348.67% while the 182 and 364-day notes were oversubscribed by +26.70% and +167.59% respectively. Save for the long tenor paper, rates were nearly unchanged on tenors.  The 91-day, 182-day & 364-day notes were allotted at 2.00%, 3.50%, & 7.0% respectively.




Primary Market Auction Result - NTB - March 17, 2021


Amount Offered (N'bn)

Total Subscription (N'bn)

Amount Allotted (N'bn)

Rate (%)

Previous Rate (%)

91 days






182 days






364 days







The Central Bank of Nigeria on the authority of The Debt Management Office on behalf of the Federal Government of Nigeria Offers for Subscription by Auction and is authorized to receive applications for 

N50,000,000,000 - 16.2884% FGN MAR 2027 (10-Yr Re-opening) *

N50,000,000,000 - 12.50% FGN MAR 2035 (15-Yr Re-opening) *

N50,000,000,000 - 9.80% FGN JUL 2045 (25-Yr Re-opening) *

Auction Date: March 24, 2021

Settlement Date: March 26, 2021


Honeywell Flour Mills Plc announced the approval of its Commercial Paper Program and a Medium-Term Note Program for refinancing/ restructuring the Company's debt profile.


Participation in the NTB market is expected to pick up as we continue to see an uptick in rates.

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FGN Bond Market

Activity picked up in the overall trading session of the FGN Bond market for the week, although there was a selling interest seen across all tenors.


Overall average benchmark yields closed at 6.26% for the week which increased W-o-W by +25.10% with sell interest seen more at the short end curve.


Average Benchmark Yields



% Change

Short Tenor (%)




Mid Tenor (%)




Long Tenor (%)




Source: FMDQ, Proshare Research


Ardova Plc announced the establishment of its N60bn bond issuance program.


As stated last week, we expect activity to pick up across the board as investors await the March bonds auction taking place in the coming week and MPC meetings.


FGN Eurobond Market

The FGN Eurobond market had a bullish trend this week which was supported by the huge sell-off of the US 10 treasuries.


Average benchmark yields declined slightly by -0.30% to close at 6.0% at the end of the week.


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 and the US treasuries.


Foreign Exchange Market

The Naira depreciated W-o-W by -1.04% against the USD at the BDC window, for the I & E FX market it remained unchanged. At the BDC window, the Naira against the British Pound depreciated W-o-W by -0.59% while against the Euro it remained unchanged


The Naira closed the week at $/N410 at the I&E FX window, at the NAFEX (spot market) it closed at $/N407.89, and at the BDC market, it closed at $/N485, £/N678, and Euros/N578. 

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Nigerian Capital Market

  • The Nigerian bourse closed the week negative as Investor Sentiment on the market was mixed on the equities market with a decline of -0.69%. The Nigerian Stock Exchange shed N139.22bn in Market capitalization W-o-W while YTD return and market capitalization currently stands at +42.99% and N20.08trn.
  • The volume of stocks traded on the exchange this week declined by -1.14% while the values of shares traded increased by -6.58%A total turnover of 2.34bn shares worth N19.27bn in 20,173 deals was traded this week by investors on the floor of the Exchange.
  • Performance across sectors was mixed this week as the NSE Banking Index was the highest gainer for the week with a gain of +2.09% while NSE Ind was the highest loser with -2.62%. NSE Oil and Gas advanced by +1.59% respectively. NSE Consumer Goods, NSE-30 and NSE Insurance dipped this week by -1.46%, -0.99% and -0.01 respectively. 

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Chart 1: Movement of NSEASI Index Points 12 Mar. 2021 - 19 Mar 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 positive movement in Market capitalization and NSI. The NSI and Market capitalization closed the week at 710.73 points and N505.20bn with a growth of +1.42% and +0.47% respectively.


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Dangote and Toni Index 


Dangote Index closed the week positive with 116.47 basis points from 116.73 basis points recorded the previous week, a decline of -0.23%. DANGSUGAR recorded a decline in share price by -5.29%, NASCON advanced by +6.43% 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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In addition, the Toni Index closed negative with 88.01 basis points from 87.96 basis points recorded the previous week, a W-o-W growth of +0.05%AFRIPRUD and TRANSCORP  closed the week negative with -10.08% and -1.20% respectively, UBCAP closed the week positive with +6.25% while TRANSCOHOT and UBA closed flat WoW.


Table 6: Toni Index W-o-W Change

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As stated last week, 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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Latest Reports This Past Week

1.     Active Voice Subscribers Declined by -0.32% QoQ in Q4 2020 - NBS

2.     Headline Inflation Increases by 17.33% YoY In February 2021, 0.86% Higher Than January 2021 Rate

3.     Nigeria's Unemployment Rate Increases to 33.3% in Q4 2020 from 27.1% in Q2 2020 - NBS

4.     NBS Publishes COVID-19 Impact Monitoring Survey Report for Nov-Dec 2020

5.     FAAC Disburses N2.49trn to FG and N2.30trn to States in Year 2020 - NBS

6.     FAAC Disburses N604.00bn in November 2020 - NBS

7.     Total Value of Capital Importation into Nigeria Stood at US$1,069.68m in Q4 2020 - NBS

8.     N295.72bn Generated as Company Income Tax in Q4 2020 - NBS

9.     N454.69bn Generated as Value Added Tax in Q4 2020 - NBS

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