Saturday, November 09,
2019 07:50 AM / Proshare Content
Nigeria: Economic Dashboard @ 011119

Editor's Pick
Source:
Cordros Weekly Economic and Market Report - November 08, 2019
Global economy
The impact of trade tensions and
weakened global demand continued take a toll on trading activities in China.
From a year ago, export shrank by 0.9% y/y, printing the third consecutive
month of declines. Perusing the breakdown provided, exports to the US,
which constitutes 19.2% of total China's exports fell by 16.2% y/y.
Furthermore, exports to Japan and Australia also declined by 7.8% y/y and 0.6%
y/y, respectively. Similarly, for the sixth consecutive month, imports dipped
by 6.4% y/y. Imports from the US dropped by 14.3% y/y. Looking ahead,
we expect the possible trade deal between the US and China to lift existing
trade tariffs to support improved trade position in coming months.
According to the Federal Statistics
Office, Germany's trade balance for September printed +15.9% y/y, the largest
expansion in three months, providing some respite for Europe's largest economy
which has suffered from the indirect impact of the U.S-China trade war. Exports
swung from a negative terrain in the prior month to +4.7% y/y, the largest
expansion in five months. Improved exports were largely driven by increased
demand from EU member states, which absorbed 59.9% of the total exports. In the
same vein, imports widened by +2.2% y/y, the first growth recorded in five months,
driven by improved domestic consumption. While we don't believe the
export-reliant economy is completely out of the woods, the reading underscores
a possibility of improved economic growth in Q3-19. Furthermore, festive
induced demand in November and December is expected to boost export and overall
trade position in last quarter of the year.
Global markets
For a third straight week, appetite
for risk assets across the globe has been consistently encouraging. This is
hardly surprising, given the growing optimism that the US and China will roll
back some of the tariffs currently in place should the phase 1 trade deal get a
nod. More so, monetary policy accommodation across developed markets, which
continues to boost equity valuations, has inspired renewed hope among equity
investors, in our opinion. For clarity, equity markets across our coverage
universe were set to close the week in the green - US (DJIA: +1.2%, S&P:
+0.8%), Euro Area (FTSE: +1.0%, Euro Stoxx: +2.1%), and Asian (CSI 300: +0.5%,
Nikkei: +2.4%) markets. Furthermore, even as the frontier market (MSCI FM:
+0.0%) stocks were flat, Emerging market (MSCI EM: +2.3%) equities posted a
strong return, supported by solid outturn in South Korea (+1.8%), Taiwan
(+1.3%), and Brazil (+1.3%).
Nigeria
Economy
As part of the FGN's policy
surrounding the closure of all land borders in Nigeria, it was announced that
the FGN has suspended the supply of petroleum products to filling stations
within 20km of all land borders. Cross border smuggling of PMS, which is solely
imported by the NNPC, has aggravated pressure on Nigeria's finances via higher
petrol importation, and thus, greater subsidy payments. In September and
October, domestic PMS consumption declined by 0.4% and 11.7% m/m, respectively.
This, we believe is linked to a reduction in illegal exportation of PMS to
neighbouring West African countries where PMS is sold at more than a 2x
premium. Data from Global Petrol Prices, shows that PMS sells for USD0.40 in
Nigeria, when compared to Benin (USD0.91), Togo (USD0.96), Chad (USD0.88) and
Cameroon (USD1.07). Against that backdrop, if border closure is
sustained, our estimates suggests an annual subsidy saving of NGN105.55
billion.
Capital markets
Equities
Amidst recent CBN's policies
directed towards stimulating growth, the impact of which has significantly
softened fixed income yields to just above inflation levels, buying interest in
stocks with attractive dividend yields, and sizeable upsides, led the Nigerian
equities market to a positive close for the first time in eight weeks. Gains in
trading sessions at both ends of the week drove the All-Share Index up by 0.1%
w/w to 26,314.49 points, and reduced the YTD loss to 16.3%. On sectors, the
Banking (+8.5%) index recorded its highest gain since the week ended 23
August 2019 driven by interest in Tier I Banks stocks. The Industrial Goods
(+2.1%) index followed suit with CCNN gaining 10.6% w/w on the announcement of
its merger with Obu Cement; the Insurance (+0.4%) index also closed positive.
Conversely, the Consumer Goods (-5.9%) and Oil & Gas (-0.4%) indices closed
in the red.
In our view, the market is a reflection of
investors' views about the expectations for the economy given the still
uninspiring macro story. Nonetheless, we expect the market might benefit over
the short-term from recent policy directions as investors seek alpha-yielding
opportunities in the face of lower yields in the fixed income market.
Money market
Average system liquidity, although
still robust, declined slightly this week (NGN409.33 billion vs. NGN421.33
billion last week), following outflows from FX and OMO (NGN232.45 billion)
auctions which offset the inflows from OMO maturities (NGN403.85 billion)
towards the end of the week. Consequently the overnight (OVN) rate rose
by 150bps w/w to close at 5.57%.
In the coming week, OMO maturities (NGN405.92
billion) are expected on the 14th of November, which should support system
liquidity and keep the rate tethered. Also, the substantial liquidity position
of the market (NGN737.55 billion) further substantiates our expectations for
the coming week.
Treasury bills
Trading in the Treasury bills market
was bearish, as the effects of the CBN's directives on OMO bills continued to
reverberate in the market. Trading volumes were very sparse, with total volume
traded declining 23.0% to NGN1.03 trillion. Foreign investors remained net
sellers of Treasury bills, as they opted to go for the more attractive OMO
bills at the auction. Consequently, the average yield widened by 68bps to
13.1%.
Amidst the persisting illiquidity in the NTB
market, we expect yields to pare next week as local players seek to reinvest significant
maturities expected. At the NTB PMA, the CBN will offer NGN125.24 billion worth
of bills to investors.
Bond
Activities in the bond market
remained bullish as local PFAs and Asset Managers sought to re-invest OMO
maturities and other excess funds amidst the illiquidity of the NTB market.
Consequently, the average yield pared by 27bps to settle at 12.9%. Also, there
were yields declines across all trading instruments in the week, signal to the
increased interest from investors, with the APR-2023 instrument (-99bps)
recording the largest decline in yield.
We expect recent developments in the Treasury
bills space to provide active trading at the bond market as investors' look for
alternatives. Additionally, market players will look to invest an expected
NGN59.12 billion in coupon payments. In effect, yield are expected to trend
downwards.
Foreign exchange
Nigeria's FX reserves continued its
descent, declining by USD20.24 million WTD (06 Nov 2019) to USD40.23 billion,
the lowest since 23 January 2019. Meanwhile, the CBN sustained its weekly FX
intervention, selling USD210.00 million across the different segments of the FX
market - USD100.00 million to the Wholesale segment, USD55.00 million to the
SMEs segment, and USD55.00 million to the Invisibles segment. Nonetheless, the
naira depreciated by 0.18% WTD to NGN362.75/USD at the I&E window but
closed flat at NGN360.00/USD at the parallel market. Elsewhere, total turnover
at the I&E window increased by 28.85% WTD to USD1.19 billion, with trades consummated
within the NGN357.00 - 362.75/USD band. In the Forwards market, the naira
weakened across all contracts - 1-month (-0.1% to NGN361.12/USD), 3-month
(-0.3% to NGN369.67/USD), 6-month (-0.5% to NGN384.49/USD) and 1-year (-0.3% to
NGN410.70/USD).
Looking ahead, we expect sustained CBN's
intervention to keep the naira resilient in the short to medium term. Thus, our
estimate suggests no naira devaluation in 2019.

Sunday,
November 10, 2019
The Association for Tourism Development in Nigeria
Multidisciplinary Conference (ATDiN) will on this day
begin its conference with the theme: Beyond Rhetoric and Idealism: Propelling a
Pragmatic and Sustainable Tourism Industry in Nigeria at the University of Nigeria
Nsukka, Enugu State.
Tuesday, November 12, 2019
The 2019 Future Energy Nigeria will on this day begin its Conference and Expo at Eko Hotel and Suites, Victoria Island,
Lagos while Annual Pension/Admin Conference (APAC) will hold on this same day at Bayelsa State
Guest House, Abuja.
The China Brand Show will begin its conference and exhibition on this day at the
Federal Palace Hotel, Victoria Island, Lagos, while the Nigeria International Brand Expo will also begin on this
day at the Landmark Event Centre, Lagos, just as the Nigerian Institute of Medical Research International Scientific
Conference will begin on the same day at the
Nigerian Institute of Medical Research, Lagos.
Wednesday, November 13, 2019
Phillips Consulting Limited
will on this day hold its Webinar
on Smart Competency-Based Recruiting.
Thursday, November 14, 2019
The Hague Institute for Innovation of Law
will on this day introduce the finalists of the Innovating Justice Challenge at
the Consulate-General of the Kingdom of the Netherlands, 14A Walter Carrington
Crescent, Victoria Island, Lagos.
The Nigerian Institute of Chartered Arbitrators will on this day hold its 40th Anniversary,
while the Annual Conference and Investiture Award Ceremony
with the theme: Building a Culture
of Arbitration & Sustainable Institution in West Africa will hold at
the Eko Hotel and Suites, Victoria Island, Lagos.
The Social Innovators Programme Awards
(SIPA) will hold on this day with the theme: People,
Profit, Planet: The Tripartite Win at the Shell Hall, Muson Centre,
Onikan, Lagos, while the Medical Women's Association of Nigeria Lagos
State Chapter will on this day begin its 21st Biennial Conference, Annual
General Scientific Meeting and Investiture of the 22nd President with
the theme: Advancing the health of Nigerians at MRC Auditorium,
Lasucom, Ikeja, Lagos.
The National
Bureau of Statistics will on the same day release the CPI and Inflation Report October 2019, Daily
Energy generated and sent out (Q3 2019), Daily Energy Generated and sent out and
Consumed and Load Allocation (Q3 2019),
Federation Account Allocation Committee (FAAC) (October 2019
Disbursement), Internally Generated Revenue at State Level ( Half Year 2019),
Liquefied Petroleum Gas (Cooking Gas) Price Watch October 2019, NATIONAL HOUSEHOLD
KEROSENE PRICE WATCH October 2019, SELECTED FOOD PRICES October 2019 and
Transport Fare Watch (October 2019)
Friday, November 15, 2019
The Africa Youth Leadership & Economic Summit will
on this day begin its 5TH LCCI Women Group
Conference Digital Revolution with the theme: Youth Entrepreneurship;
Creating Partnership at Golden Tulip Hotel Festac, Lagos, while the National Bureau of Statistics will on the same day release the Premium Motor Spirit (Petrol)
Price WATCH October 2019
The Nigeria-British Chamber of Commerce will on this day hold its Presidential dinner and
Inauguration at Eko hotel and Suites, Victoria Island, Lagos, while the Nigerian National Co-operative Awards, Symposium and Exhibitions will also hold on this day at Bolingo Hotel, 777 Independence Avenue,
Abuja.
The Nigeria Bureau of Statistics will on this day release the NATIONAL
HOUSEHOLD KEROSENE PRICE WATCH October 2019
Saturday, November 16, 2019
The Nigerian Bureau of Statistics will release the NATIONAL
HOUSEHOLD KEROSENE PRICE WATCH October 2019

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

Contact for Details:
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Latest Reports This Past Week
1. Nigeria's Total
Public Debt Stood At N25.70trn in Q2 2019 - NBS
2. Average Price of
1kg of Rice Increased By 4.07% MoM to N371.13 in September 2019 - NBS
3. Average Fare For
Intercity Journey Increased By 0.15% MoM in September 2019 - NBS


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