What To Expect From The Markets This Week - 310122


Saturday, January  29, 2022, / 07:20 AM / Proshare Content / Header Image Credit: EcoGraphics

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Nigeria: Economic Dashboard @280122

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Editor's Note

Source: Proshare Research - January 29, 2021

Nigeria Economy

  • According to Money and Credit data recently released by the Central Bank of Nigeria (CBN) money supply increased from N38.6 trillion in December 2020 to approximately N44 trillion in December 2021 thereby recording an increase of 13.8% year-on-year (YoY), 10.8 percentage points higher than the estimated three per cent growth in Money supply recorded in 2020. Meanwhile, Currency outside banks (COB)-an index of financial exclusion, hit all-time high of N2.9 trillion in December 2021.
  • According to a recent Bank of Industry (BOI) report titled, 'Aid for Productivity' more than 40 per cent of Nigerians presently live below the poverty line, while youth unemployment in Nigeria stood at 40% before COVID-19 it has since risen to 53% in the fourth quarter of 2020. The report also stated that about 700 million people across the globe still live on $1.9 a day, while more than half of the world's poor are in Africa.
  • The Central Bank of Nigeria has stated that effective from February 1, all import and export operations will require the submission of an electronic invoice authenticated by the authorised dealer banks on the Trade Monitoring System-- single-window portal. The program which is primarily aimed at determining accurate value from import and export was communicated through a circular which stated that products that are more than 2.5% around the vertical price would be queried and will not be allowed successful completion of Form M or Form NXP.
  • The Monetary Policy Committee (MPC) of the Central Bank of Nigeria concluded its two-day meeting. At the end of which, the committee resolved to hold the monetary policy rate and all other policy parameters constant. The benchmark interest rate (MPR) was retained at 11.50%, the asymmetric corridor remained at +100/-700 bps around the MPR, the cash reserve ratio was retained at 27.50%; anThe Liquidity Ratio remained  30.00%

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Global Economy

  • Data from the Bureau of Economic Analysis (BEA) suggests that the U.S. economy grew at an annual rate of 6.9 percent in the fourth quarter of 2021 beating forecast and outpacing the 2.3% real GDP growth recorded in the third quarter. The fourth quarter increase in real GDP primarily reflected increases in private inventory investment, while exports, personal consumption expenditures (PCE), and non-residential fixed investment also recorded some gains. Analysts believe that the better-than-expected growth would not last given that spending has slowed.
  • On Thursday, the U.S. Labor Department reported that initial jobless claims last week fell by 30,000 to reach 260,000 after hitting a three-month high amid Omicron surge. Prior to that, the figure had been rising for three weeks in a row, as the fast-spreading COVID-19 Omicron variant continued to disrupt labor market recovery.
  • Speaking at a virtual press conference after the FOMC Meeting on Wednesday, Fed Chair Jerome Powell said that the U.S. economy no longer needs sustained high levels of monetary policy support. Moreso, the economy had recorded remarkable progress in the labor market while the high inflation has hit a record high. Powell admitted that inflation has gotten "slightly worse" since the Fed last met in December. He said raising the Fed's benchmark rate, which has been pegged at zero since March 2020, will help prevent high prices from becoming entrenched. Meanwhile, Republicans have referred to rising prices as one of their principal campaign points as they look towards the November midterm elections. 
  • South Korea's economic growth hit an 11-year high last year on the back of strong exports and corporate investments, rebounding from the previous year's negative growth. The Bank of Korea announced on Tuesday that the country's economy expanded 4% in 2021, turning around from minus 0.9% growth a year earlier and meeting the government's 4% target. The central bank also said exports grew 9.7% as global demand for  semiconductors and other [products] continues to be robust. Meanwhile, Economists say the upturn in South Korea's economy will pave the way to tighter monetary policy this year. 

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Review and Outlook

After a 3.4% contraction in 2020, world real GDP rebounded at an estimated 5.6% in 2021, reaching a new high in the first quarter. Global growth is projected to slow to 4.2% in 2022, slightly below last month's forecast owing to weaker performances in Western Europe, North America, mainland China, and Japan. Just as the 2021 rebound was broadly based, most regions will experience a deceleration in 2022. A notable exception is the Middle East and North Africa, where higher oil export revenues will spark a pickup in growth.  Global real GDP growth will settle to 3.4% in 2023 and 3.1% in 2024 as fiscal and monetary policies tighten and pent-up consumer demand is satisfied.


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Commodities Market

Weekly Review and Outlook



  • The Minister of State for Petroleum Resources, Timipre Sylva, on Tuesday, said the Federal Government (FG) is proposing to extend the period for the implementation of the subsidy removal on Premium Motor Spirit (Petrol) by 18 months.
  • On her part, the Minister of Finance, Zainab Ahmed, said the FG was exploring alternatives to the premium motor spirit and pushing to step up the country's crude oil refining capacity.
  • The President of Dangote Industries, Aliko Dangote, has said the Dangote Refinery would start with a processing capacity of 540,000 barrels per day (b/d) and the refinery could begin processing before the end of the third quarter of 2022 as mechanical work on the refinery has been completed.
  • The Minister of State for Petroleum Resources, Timipre Sylva, on Monday, said the FG is partnering with oil marketers in the downstream sector to perfect plans for the full deployment of Autogas in filling stations and the conversion of 200,000 commercial vehicles to run on gas this year.
  • The Nigeria Labour Congress and its affiliate unions on Tuesday suspended its planned nationwide protests on the reversal of the Federal Government's plan to stop the subsidy on petrol.
  • The Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) and the Lagos Chamber of Commerce and Industry (LCCI), on Tuesday, proposed a phased removal of the subsidy accompanied by wide consultations with major stakeholders.
  • The Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission, Gbenga Komolafe, on Tuesday, said the commission would soon roll out its policy position for the marginal field bid round to eligible awardees who have fully or partly complied with signature bonus payment in the 2020 marginal field programme.
  • The GMD of Nigerian National Petroleum Company Limited, Mele Kyari, on Thursday, disclosed that the company was working with AfreximBank to raise $5bn funding for the state oil firm.
  • The Minister of Finance, Zainab Ahmed, has disclosed that the NNPC has presented a bill of N3 trillion for the 18months extension of the petroleum subsidies. 


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  • Oil prices rose on Monday on worries about supply disruption amid rising tensions in Eastern Europe and the Middle East, which could make an already tight market even tighter, while OPEC and its allies continued to struggle to raise output.
  • The Energy Commissioner of the European Union, Kadri Simson, has said the EU is in talk with partners about the potential for increasing gas supplies to the bloc given the current gas supply crunch in the continent attributable to limited flows from Russia.
  • Goldman Sachs analysts have said crude oil prices will prime above $100 a barrel in 2022 as the oil market remains in a surprisingly large deficit on mild hit to demand from the Omicron Covid-19 variant against declining OPEC+ spare capacity to a historical low.
  • The Royal Dutch Shell Plc has officially changed its name, ditching the "Royal Dutch", following plans to scrap its dual share structure and move its head office from the Netherlands to Britain. The London and Amsterdam stock exchanges were expected to reflect the name change on January 25 while the New York Stock Exchange will follow on January 31.
  • Global coal prices have risen to record highs on fear that a standoff between Russia and western nations will cut off gas supplies and trigger a switch to fossil fuel, adding to the slow recovery from recent Indonesia's coal export ban.
  • The Chief Executive Officer of Saudi Aramco, Amin Nasser, on Thursday, said the current energy transition is not going smoothly and that he proposed investment in both existing and new energies until low-carbon energy could grow and mature enough to meet rising energy demand.
  • Oil prices rose on Friday, set for their sixth weekly gain, amid concerns of tight supplies as major producers continue their policy of limited output increases amid rising fuel demand.
  • Brent had a weekly growth of +3.45% (see Table 1).


Gold depreciated by -2.64% while Silver also depreciated by -3.93% W-o-W (see Table 1).



  • Cocoa prices dipped by -4.02% W-o-W.
  • Corn prices appreciated by +2.77% W-o-W while Sugar depreciated by -3.65% (see Table 1).

Table 1Weekly Change in Commodity Prices





Weekly Chg






































Source: CNBC, Proshare Research

*Data for 28th January 2022 is as of 5:47pm (Nigerian Time)



  • In the coming week, oil prices are expected to continue the price surge as supply chain pressure continue
  • Gold price is expected to decline in the coming week as FED aggressively tries to tackle rising inflation.
  • Cocoa prices are expected to appreciate in the coming week as demand still outpaces supply in the global market
  • Sugar prices are expected to appreciate in the coming week with signs of good supply hitting the market
  • Corn prices are expected to continue its price surge as demand for grains are beginning to outpace supply.

Fixed Income and Money Market 

Currency Market


The domestic currency started the week depreciating against the US Dollar, however, at the end of the week, Naira closed bullish.

The Naira appreciated against the US Dollar compared to the previous trading session.

On a week-on-week (W-on-W) basis, the Naira closed flat, trading at N416/USD, while it depreciated at the Nigerian Autonomous Foreign Exchange Fixing (NAFEX) window by +0.09%.


Average Benchmark Yields




% Change

I & E FX Window








Source: FMDQ, Proshare Research



Money Market


System liquidity remained elevated this week, pushing money market rates to single digits.


At the close of the trading on Friday, open repo (OPR) and overnight rates (O/N) settled at 1.00% and 1.25% respectively indicating a W-o-W dip of -93.33% and -91.80%.



Money Market Rate




% Change

OPR (%)




O/N (%)




Source: FMDQ, Proshare Research



We expect rates to hover around current levels barring any significant outflows from the Apex bank.


Treasury Bills Market

The treasury bills market was quiet this week albeit with some massive interests on the April-22 maturity.


At the close of trading on Friday, the market was bullish with buying interest seen both at the NT Bills and OMO Bills. Average benchmark yields for T. Bills fell by -1.10%, yields on OMO bills also fell by -0.53%.



Average Benchmark Yields




% Change

T. Bills (%)




OMO Bills (%)




Source: FMDQ, Proshare Research


We expect activity next week to be weak depending on the market liquidity situation. 

The DMO sold N223.76 billion worth of notes against N129.34 billion offered at its NTB auction this week. The 91-day, 182-day & 364-day notes were allotted at 2.48%, 3.30%, and 5.40%, respectively. Compared to the previous auction, the rate on the 91-day, 182-day & 364-day paper declined by 2bps, 14bps, and 10bps respectively.

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FGN Bond Market


The local bond market was mostly bullish this week with few bearish trading sessions in the week.


At the close of trading on Friday, the market closed mixed. Overall average benchmark yields closed at 11.53%, with benchmark yield falling by -2.17%.



Average Benchmark Yields




% Change

Short Tenor




Mid Tenor




Long Tenor




Source: FMDQ, Proshare Research 


FGN Eurobond Market


The Eurobond market traded sideways at the close of trading this week, with minimal volumes traded across the board. The average benchmark yields advanced marginally by 1bp to 6.70%.

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