What To Expect From The Markets This Week - 050421

Proshare

Saturday, April, 2021 07:00 AM / Proshare Content / Header Image Credit: EcoGraphics


  

Nigeria: Economic Dashboard @ 020421  

Proshare Nigeria Pvt. Ltd.



Editor's Note

Source: Proshare Research - April 03, 2021

Nigeria Economy

  • Nigerian States and Federal Debt Stock data as of 31st December 2020 reflected that the country's total public debt portfolio stood at N32.92trn. Nigeria's total public debt portfolio showed that N12.71trn or 38.60% of the debt was external while N20.21trn or 61.40% of the debt was domestic. Further disaggregation of Nigeria's foreign debt showed that $17.93bn of the debt was multilateral; $4.06bn was bilateral from the AFD, Exim Bank of China, JICA, India, and KFW while $11.17bn was commercial which are Eurobonds and Diaspora Bonds and $186.70 as Promissory notes. The total States and FCT domestic debt was put at N4.19trn with Lagos state accounting for 12.15% of the debt stock while Jigawa State has the least debt stock in this category with a contribution of 0.74%.
  • The indebtedness of the Distribution Companies, DISCOs to Nigerian Bulk Electricity Trading Plc, NBET, increased by +11.2% to N510.53bn in 2020 from N453.1bn in 2019. According to NBET data, it sent an invoice value of N730.71bn to the Power Distribution Companies but only received N220.18bn, which left a balance of unremitted N510.53bn.
  • The Federal Government has officially flagged off the Export Expansion Facility Programme (EEFP) and launched the first online Grant Management Portal (GMP) for non-oil exports. The EEFP is part of the Federal Government's N2.3trn fund of the Nigeria Economic Sustainability Plan (NESP) that focuses on cushioning the effects of the coronavirus pandemic on non-oil export businesses thereby safeguarding jobs and creating new jobs.
  • The Senate Committee on Local and Foreign Debts has asked the ministries of Agriculture, Finance, and the Debt Management Office to provide details of the Euros 995m and the $1.5bn foreign loans for the necessary approvals. The Federal Government is seeking foreign loans for mechanized farming and execution of critical infrastructure across the 36 states of the federation as part of measures to prevent the third wave of the coronavirus in the country, but the Senate panel expressed reservations on preparedness for the loan's utilization.


Proshare Nigeria Pvt. Ltd.

Global Economy

  • Kenya's inflation rate rose to 5.9% in March 2021. The prices of food and non-alcoholic drinks, which make up a third of the inflation basket rose by +6.7% due to increases in the cost of items such as mangoes and beef. Also, the housing, water, electricity, gas, and other fuels index grew by +4% while the transport index increased significantly by +18%.
  • Japanese big manufacturers' sentiment improved to pre-pandemic levels in the first quarter and companies stepped up capital spending plans, suggesting that it was benefiting from a solid recovery in global demand. According to the central bank survey, confidence among big non-manufacturers also recovered from three months ago. According to the Bank of Japan closely watched "tankan" survey, the headline index for big manufacturers' sentiment rose to plus 5 in March from minus 10 in December, marking the third straight quarter of improvement and hitting the highest level since September 2019.
  • China's factory activity in March expanded at the slowest pace in almost a year on softer overall domestic demand, but underlying economic conditions remained positive even as input and output inflationary pressures intensified for manufacturers. The Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) declined to 50.6 in March, the lowest level since April 2020. Although supply chain disruption related to previous coronavirus outbreaks eased, the private survey showed factories reported a sharp increase in input costs, which surged at their fastest clip in 40 months.
  • President Joe Biden unveiled a more than $2trn infrastructure package.  Biden's plan includes roughly $2trn in spending over eight years and would raise the corporate tax rate to 28% and implement measures designed to stop the offshoring of profits to fund it. The proposal includes a $621bn into transportation infrastructure such as bridges, roads, public transit, ports, airports and electric vehicle development, direct $400bn to care for elderly and disabled Americans, inject more than $300bn into improving drinking-water infrastructure, expanding broadband access and upgrading electric grids, put more than $300bn into building and retrofitting affordable housing, along with constructing and upgrading schools, invest $580bn in American manufacturing, research and development and job training efforts.


Proshare Nigeria Pvt. Ltd.


Commodities Market

Energy

Domestic

  • The President on Monday said the Nigeria Liquefied Natural Gas company has generated $114bn revenues for the country. The NLNG, which contributes about 1% to GDP, has generated $114bn in revenues over the years; $9bn in taxes, $18bn in dividends to the Federal Government and $15bn in feed gas purchase. The Managing Director, NLNG, Tony Attah, announced that the ongoing Train-7 project being handled by the company would attract $10bn to Nigeria and in addition to over 12,000 jobs for Nigerians.
  • The Petroleum Tanker Drivers Branch of the Nigeria Union of Petroleum and Natural Gas Workers has said its members will withdraw their services if the installation of safety valves is not made mandatory in all petroleum trucks with effect from May 1. The body also express concerns about the reluctance of the Nigeria Association of Road Transport Owners to negotiate the renewal of the Collective Bargaining Agreement for new working conditions for the petroleum tanker drivers.
  • The NNPC, the Nigerian Content Development and Monitoring Board, Brass Fertilizer and Petrochemical Company Limited and DSV Engineering have signed two key agreements (accession and share subscription) for the construction of a methanol plant and a gas processing plant in Odeama, Brass, Bayelsa State.
  • Prices rebounded about 6% on Wednesday after a ship ran aground in the Suez Canal, and worries that the incident could tie up crude shipments gave prices a boost after a slide over the last week.
  • Oil prices fell 4% per barrel on Thursday, extending a string of market weakness on renewed lockdowns in Europe and Asia to head off a rising coronavirus infection rate.
  • On Friday, Oil prices reversed a sharp sell-off a day earlier to rise 1% on mounting fears that it could take weeks to dislodge a giant container ship blocking the Suez Canal, which squeezes supplies of crude and refined products.

 

Foreign

  • Shipping resumed again late on Monday in Egypt's Suez Canal after tugs refloated a giant container ship which had been blocking the channel for almost a week, causing a huge build-up of vessels around the waterway.
  • Amidst the third wave of [infections] in Europe, new lockdowns, delays in the dissemination of vaccines, failed tourist season in Asia, new variants in India and signs of a slowdown in the pace of growth in China, OPEC and its allies have agreed to lower the forecast that oil demand would grow by 5.9 million barrels per day this year.
  • Oil prices fell about 2% on Wednesday as fresh lockdowns in Europe stoked fuel consumption fears and a pessimistic demand outlook but crude prices for May rose on Thursday on expectations that a meeting of OPEC and its allies would yield output constraint in the face of resurgent COVID-19 infections in some regions.
  • Brent had a weekly decline of -1.37% (see Table 1).

 

Metals

Gold depreciated by -0.26%, while Silver also dipped by -1.60%W-o-W (see Table 1).

 

Agriculture

  • Cocoa prices declined by -1.88% this week.
  • Corn prices appreciated by 4.61% W-o-W while Sugar plunged by -2.37% (see Table 1).

 

Table 1Weekly Change in Commodity Prices

Commodity

01-Apr-21

26-Mar-21

31-Dec-20

Weekly Chg

YTD Chg

Brent

63.38

64.26

51.8

-1.37%

22.36%

Gold

1728.14

1732.59

1898.67

-0.26%

-8.98%

Silver

24.64

25.04

26.4011

-1.60%

-6.67%

Cocoa

2400

2446

2597

-1.88%

-7.59%

Corn

573

547.75

484

4.61%

18.39%

Sugar

14.82

15.18

15.28

-2.37%

-3.01%

Source: Bloomberg, Proshare Research

*Data for 26th Mar 2021 is as of 3:47 pm (Nigerian Time)

 

Outlook

  • In the coming week, oil prices are expected to rise on optimism about U.S. and European economic recoveries and expectations OPEC and its allies will keep production curbs in place.
  • Gold prices are expected to be mixed in the coming week, as the dollar and U.S. Treasury yields continues to pressure the metal
  • Cocoa prices to decline next week amid concerns that demand in Europe could be curbed as another wave of the COVID-19 pandemic hits the continent.
  • Sugar prices are expected to dip next week due to the lack of demand and oversupply.
  • Corn prices are expected to be continue its upward trend in the coming week as adverse weather in Brazil could further limit corn production while demand for corn-based ethanol in the United States is expected to support prices.



Proshare Nigeria Pvt. Ltd.



Fixed Income and Money Market 

  

Money Market

Money market rates traded in double-digit for most of the trading session this week despite robust system liquidity which was supported by OMO bills maturity.

 

At the close of the trading session, this week funding rates were at an all-time high, Open Buyback (OBB) closed at 30.00% while Overnight (O/N) rates closed at 32.50% indicating a Week-on-Week (W-o-W) significant rise of +185.71% for OBB and +202.33% for O/N rates.

 

Money Market Rate

 

26-Mar-21

01-Apr-21

% Change

OBB

10.50

30.00

+185.71%

O/N

10.75

32.50

+202.33%

Source: FMDQ, Proshare Research


Rates are expected to continue to trend in double-digit supported funding obligations.

 

Treasury Bills Market

The trading session for the Nigerian Treasury Bills started the week quiet as market attention was drawn to the NTB auction which took place in the week.


At the close of the week, average benchmark yields for the T-bills dipped, it declined W-o-W by -2.35% to close at 4.13%, and OMO bills yields fell by -2.60% to close at 6.38%. Yield for CBN's Special bills also saw a dip of -3.83% W-o-W.

 

Average Benchmark Yields

26-Mar-21

1-Apr-21

% Change

T. Bills (%)

4.23

4.13

-2.35%

OMO Bills (%)

6.55

6.38

-2.60%

SPEB

6.26

6.02

-3.83%

Source: FMDQ, Proshare Research

 

Proshare Nigeria Pvt. Ltd.



The Central Bank sold N138.72 billion worth of notes against N95.68 billion offered at its NTB auction today. The 364-day notes were over-subscribed by +179.72% while the 91-day notes and 182-day notes were undersubscribed by -5.80% and -27.61% 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%, & 8.00% respectively. Compared to the previous auction, rates on the 91-day & 182-day were unchanged while the 364-day paper rose by100bps.

 

NTB Primary Market Auction Result - 31 March 2021

Tenor

Amount Offered (N'bn)

Total Subscription (N'bn)

Amount Allotted (N'bn)

 Rates (%)

91 day

10

9.42

2.88

2

182 day

17.6

12.74

3.24

3.5

364 day

68.08

190.43

138.72

8

Source: CBN, Proshare Research

 

The Central Bank also offered and sold N100.00 billion worth of OMO notes in its auction in the week. The offer was over-subscribed across all tenors. The 89-day notes were oversubscribed by +235.0% while the 180-day and 362-day notes were oversubscribed by +140.75% and +250.19% respectively.  The 97-day, 181-day & 342-day notes were left unchanged from the previous auction at 7.00%, 8.50%, & 10.10% respectively.

OMO Bill Primary Market Auction Result - 31 March 2021

Tenor

Amount Offered (N'bn)

Total Subscription (N'bn)

Amount Allotted (N'bn)

 Rates (%)

89 day

10

33.5

10

7

180 day

20

48.15

20

8.5

362 day

70

245.13

70

10.1

Source: CBN, Proshare Research

 

 

FGN Bond Market

The overall trading session of the FGN bond market was quiet this week, as investor attention was skewed towards the Primary Market auction in the week. At the close of the week, the market ended in mixed sentiments as selling interest was seen majorly at the long end of the curve.

 

Overall average benchmark yields closed at 6.76% for the week which decreased W-o-W by -1.10%.


Average Benchmark Yields

26-Mar-21

1-Apr-21

% Change

Short Tenor (%)

5.18

4.99

-3.61

Mid Tenor (%)

6.97

6.95

00.31

Long Tenor (%)

10.94

11.07

+1.14

Source: FMDQ, Proshare Research

 

FGN Eurobond Market

The FGN Eurobond market was bearish this week as market sentiment remains soft on the back of the rising US treasury yields stoked by inflationary concerns and crude oil price concerns.


At the close of the week, average benchmark yields rose by +4.09% to close at 6.61% at the end of the week.


For the FGN Eurobond market, 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 will respond to President Biden's US$2trn plan.


Foreign Exchange Market

The Naira closed flat W-o-W against the USD and British Pound at the BDC window, for the I & E FX market it appreciated by +0.17%. At the BDC window, the Naira against the Euro appreciated W-o-W by +0.35%.


The Naira closed the week at $/N409.30 at the I&E FX window, at the NAFEX (spot market) it closed at $/N407.63, and at the BDC market, it closed at $/N485, £/N675, and Euros/N574.

 

 



Proshare Nigeria Pvt. Ltd.




Nigerian Capital Market

  • The Nigerian bourse closed the week negative with a decline of -0.76%. The Nigerian Stock Exchange lost N156.67bn in Market capitalization W-o-W while YTD return and market capitalization currently stands at -3.36% and N20.36trn respectively.

  • The volume and value of stocks traded on the exchange this week declined by -4.58% and -17.01% respectively. A total turnover of 1.44bn shares worth N19.04bn in 17,400 deals was traded this week by investors on the floor of the Exchange.
  • Trading in the top three equities by volume were GTBANK, UBN and WEMABANK. They accounted for 670.35m shares worth N10.331bn in 1,990 deals, contributing 46.39% and 54.26% to the total equity turnover volume and value respectively

  • Performance across sectors was mixed this week as the NSE-30 Index was the highest gainer for the week with a gain of +11.09%, NSE-Insurance and NSE Consumer Goods, advanced by +2.82% and +1.93% respectively while NSE Ind recorded the highest loss for the week with -2.09%, NSE Banking and NSE Oil and Gas declined by -1.54% and -0.25% respectively.

 Proshare Nigeria Pvt. Ltd.



Chart 1: Movement of NSEASI Index Points 26 Mar. 2021 - 01 Apr. 2021

Proshare Nigeria Pvt. Ltd.



Source: NSE, Proshare Research

 

Proshare Nigeria Pvt. Ltd.

NASD OTC

 

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 745.08 points and N529.61bn with a growth of +2.64% and +2.64% respectively.

 

 

 Proshare Nigeria Pvt. Ltd.



Dangote and Toni Index 

 

Dangote Index closed the week positive with 114.01 basis points from 118.77 basis points recorded the previous week, a growth of -4.01%. DANGSUGAR recorded a growth in share price by +3.66%, NASCON closed flat while DANGCEM dipped by -4.44% WoW. DANGCEM recorded the highest decline W-o-W.

 

Table 2: Dangote Index W-o-W Change

Proshare Nigeria Pvt. Ltd.

 

 

In addition, the Toni Index closed negative with 87.73 basis points from 84.84 basis points recorded the previous week, a W-o-W decline of +3.41%AFRIPRUD, UBA, TRANSCORP and UBCAP closed the week positive with +0.95%, +3.68%, +1.23% and +7.21% respectively, while TRANSCOHOT closed flat WoW.

 

Table 3: Toni Index W-o-W Change

Proshare Nigeria Pvt. Ltd.

 

 

Outlook

 

In the coming week, we expect astute investors to take positions in dividend-paying stocks as more companies release their full-year 2020 corporate earnings although full year result season is gradually comin to an end.

 

In addition, we expect investors' to monitor the bond auction results and focus on movement of yields in the fixed income 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.

Previous Week(s) Market Outlook

1.     What To Expect From The Markets This Week - 290321

2.     What To Expect From The Markets This Week - 010321

3.     What To Expect From The Markets This Week - 220221

4.     What To Expect From The Markets This Week - 150221

5.     What To Expect From The Markets This Week - 080221


Proshare Nigeria Pvt. Ltd.


Latest Reports This Past Week

1.     38.60% of Nigeria's Total Public Debt Was External in Q4 2020 - NBS

2.     Average Price of 1kg of Tomato Increased by 11.33% YoY in February 2021 - NBS

3.     Average Fare Paid by Commuters for Intercity Journey Increased by 1.13% MoM in February 2021 - NBS

4.     FAAC Disburses N619.34bn in January 2021 - NBS

5.     NBS Publishes COVID-19 Impact Monitoring Survey Report for January 2021

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


Proshare Nigeria Pvt. Ltd.



Related News

1.     Investors Lose N196.93bn WoW as NSEASI Dips by -0.96% to Close the Week Negative

2.     Investors Lose N116.14bn as NSEASI Dips by -0.57% Amid Negative Market Breadth

3.     Investors Lose N118.38bn as NSEASI Dips by -0.57% Amid Negative Market Turnover

4.     Investors Gain N145.03bn as NSEASI Inches Up by 0.71% to Open the Week Positive



Proshare Nigeria Pvt. Ltd.



Read More - The Monthly Proshare CONFIDENTIAL  

1.      The Nigerian Capital Market Report 2020: Leveraging a Crisis

2.     Oil and Gas: Working the New Normal in the Time of a Pandemic

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

4.     Outlook 2021: Understanding the Mega Trends of a Crucial Year for an Economy

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

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

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

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

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

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

11.   Budget 2019: The Hidden Monsters

12.  Surviving Uncertain Times in the Nigerian Financial Market

13.  The Rich, The Poor and Buharinomics

14.  Nigerian Banks- Performance - H1 2018

15.  AMCON and Financial Services Debt Burden in Nigeria

16.  Poverty Tracker and Nigeria: Raising The Red Flag

17.  POCKET Economics: Addressing Income Inequality

18.  The Silent Drug Epidemic: A Gathering Storm

19.  Judging IMF's Position on Development Indices

20. Money Market: The Folk Road

21.  The Headache of Missing Targets

22. 2018 Outlook on the Nigerian Economy: The Need for an Even Keel

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

24. States and the Rising Weight of Debt



Proshare Nigeria Pvt. Ltd.



Proshare Nigeria Pvt. Ltd.



Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.

READ MORE:
Related News
SCROLL TO TOP