What To Expect From The Markets This Week - 030521


Saturday, April 24, 2021 07:40 AM / Proshare Content / Header Image Credit: EcoGraphics

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Nigeria: Economic Dashboard @ 300421 

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Editor's Note

Source: Proshare Research - May 01, 2021

Nigeria Economy

  • The World Bank in a statement titled 'Seven countries account for two-thirds of global gas flaring' noted that Nigeria and six other countries were responsible for two-thirds of global gas flaring. According to the World Bank gas flaring satellite data for 2020, Russia, Iraq, Iran, the United States, Algeria, Venezuela, and Nigeria remain the top seven gas flaring countries. Furthermore, it noted that these seven countries produce 40% of the world's oil each year, but account for roughly two-thirds (65%) of global gas flaring. This trend is indicative of ongoing, though differing, challenges facing these countries. According to the Global Director for the Energy and Extractive Global Practice at the World Bank, Demetrious Papathanasiou "In the wake of the coronavirus pandemic, oil-dependent developing countries are feeling the pinch, with constrained revenues and budgets. But with gas flaring still releasing over 400m tons of carbon dioxide equivalent emissions each year, now is the time for action. We must forge ahead with plans to dramatically reduce the direct emissions of the oil and gas sector, including from gas flaring".
  • According to figures from the Central Bank of Nigeria, it injected $1.47bn into the foreign exchange segment of the market as part of its efforts to stabilize the naira in January 2021. This was a decline of -47.4% and -64.0% from the level in the preceding month and the corresponding period of 2020, respectively. A disaggregation showed that foreign exchange sales at the I&E, SMIS, SME, and interbank fell by -79.9%, -38.3%, -19.8%, and -37.3% to $0.22bn, $0.48bn, $0.10bn, and $0.04bn, respectively. Similarly, foreign exchange cash sales to BDC operators and matured swap transactions fell by -19.3% and -48.7%, compared with its level in the preceding month to $0.42bn and $0.12bn respectively in the review period.
  • The Nigerian Electricity Regulatory Commission on Monday announced that another tariff review for Nigeria's 11 power distribution companies would hold in July. This was disclosed in its notice of Minor and Extraordinary Review of Tariffs for Electricity Transmission and Distribution Companies. The commission explained that the extraordinary tariff review was a result of changes in inflation, foreign exchange, gas prices, available generation capacity, and capital expenditure and also noted that the Multi-Year Tariff Order provided for minor reviews every six months and major reviews in every five years.
  • The CBN in its disclosed report titled 'Updated list of International Money Transfer Operators in Nigeria as of April 01, 2021' added 10 companies to the list of International Money Transfer Operators licensed in the country. In March, the CBN listed only 47 IMTOs as licensed operators. While some of the operators had their addresses in Nigeria, others were based outside the country.
  • According to the World Bank in its enlarged report on Nigeria Power Sector Recovery Programme noted that the Federal Government of Nigeria is spending $1.5bn (N568.5bn at N379/$ exchange rate) annually to fund electricity tariff shortfalls which could further increase if the country fails to take the right action. It noted that Nigeria's power sector was operationally inefficient with unreliable supply exacerbated by high losses and lack of payment discipline. Picking on the various arms of the sector, the bank stated that power generation was characterized by high non-available capacity because many plants were out on fault, damage, maintenance, major overhaul, etc.  Furthermore, gas and transmission constraints lead to non-operational capacity. Resolving policy/regulatory challenges and Disco (distribution companies) issues are key to free up stranded capacity. 

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Global Economy

  • Kenya's trade deficit widened by 13.49% in the first two months of the year, largely on increased expenditure on manufactured materials and fuel imports. The trade deficit increased to Sh198.64bn from Sh175.03bn a year ago amid reduced disruptions in global supply chains and increased cost of shipping in fuel. The value of imports increased by +10.78% to Sh20.45bn between January-February 2021, provisional trade data published by the Central Bank of Kenya (CBK) suggests a higher growth than 6.63% to Sh121.81bn for exports. The CBK in March attributed the narrower gap to a lower import bill for machinery and transport equipment as well as improvement in tea and horticultural exports and remittance receipts.
  • Kenya has struggled to diversify its exports away from traditional tea, horticulture, and coffee, which are largely sold raw, exposing its farmers to price shocks in the international commodity market.
  • The German economy contracted by -1.7% in the first quarter of 2021. The contraction could be attributed to the lockdown that was put in place in November to contain the coronavirus which stifled private consumption. According to the Federal Statistics Office, this affected household consumption, while exports of goods supported the economy. The economy had expanded by an upwardly revised +0.5% in the last three months of last year as strong demand for German goods from China and the US helped the manufacturing sector offset headwinds created by subdued consumption.
  • The eurozone economy contracted in the first quarter of 2021, as countries implemented new lockdowns and restrictions amid the third wave of coronavirus infections. Gross Domestic Product in the region fell by -0.6% Q-o-Q, according to preliminary data released by Europe's statistics office Eurostat. This marks the second consecutive quarter of contractions, meaning the region is in a technical recession. It comes as most of the region's largest economies-Germany, Italy, and Spain recorded a decline in activity during the first three months of the year. The sharpest fall in activity occurred in Portugal, which has faced a wave of new Covid cases and led to the country's second lockdown. France was the only major economy in the EU that posted a growth of +0.4% in Q1 2021. Although, the French economy remains below its pre-Covid levels.

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Commodities Market



  • On Monday, the Nigerian Electricity Regulatory Commission announced that another tariff review for Nigeria's 11 power distribution companies would hold July.
  • Also on Monday, Nigerian National Petroleum Corporation (NNPC) reiterated its statement that the price of petrol is not going to be adjusted despite the fluctuations in global crude oil prices until the Federal Government, organized labor, and other stakeholders agree on pricing issues.
  • Kano State Electricity Distribution Company on Tuesday signed a $100m Memorandum of Understanding with a foreign investor, Konexa, for the generation, storage, and distribution of electricity.
  • The World Bank on Wednesday said Nigeria and six other countries were responsible for two-thirds of global gas flaring. The World Bank stated, "Gas flaring satellite data from 2020 reveals that Russia, Iraq, Iran, the United States, Algeria, Venezuela, and Nigeria remain the top seven gas flaring countries for nine years running, since the first satellite was launched in 2012.



  • Oil prices fell on Monday on fears that surging COVID-19 cases in India will drive down fuel demand in the world's third-biggest oil importer and as investors adjusted positions ahead of a planned increase in OPEC+ oil output from May.
  • Oil prices edged higher on Tuesday as OPEC, Russia and their allies agreed to stick to plans to raise output slightly from May 1, suggesting they don't see a lasting impact on demand from India's coronavirus crisis.
  • On Wednesday, prices rose further amid optimistic forecasts of global fuel demand recovery, while the rapid spread of COVID-19 infections in India and a bigger-than-expected build in U.S. crude stocks capped gains.
  • Oil prices extended gains on Thursday after rising 1% the previous session, as bullish forecasts on recovering demand this summer outweighed concerns about the impact of rising COVID-19 cases in India, Japan, and Brazil.
  • Oil prices slipped on Friday, taking a breather after touching their highest in six weeks as concerns of wider lockdowns in India and Brazil to curb the COVID-19 pandemic offset a bullish outlook on summer fuel demand and economic recovery.
  • Brent had a weekly growth of 2.19% (see Table 1).


Gold depreciated by -0.55% while Silver also declined by -0.42% W-o-W (see Table 1).



  • Cocoa prices declined by -2.49% this week.
  • Corn prices appreciated by 4.09% W-o-W while Sugar also dipped by -0.30% (see Table 1).


Table 1Weekly Change in Commodity Prices





Weekly Chg






































Source: Bloomberg, Proshare Research

*Data for 30th Apr 2021 is as of 5:22pm (Nigerian Time)



  • In the coming week, oil prices are expected to appreciate marginally as India's demand worries linger but rising consumption in the United States and China to underpin prices.
  • Gold prices are expected to be mixed in the coming week, as the string of consecutively strong U.S. economic data, U.S. treasury yields, and the dollar keeps weighing the precious metal.
  • Cocoa prices to decline next week on weak demand from Europe and production surplus in Ghana and Ivory Coast.
  • Sugar prices are expected to rise next week due to supply tightness as India, a top producer of the commodity battles new Covid cases.
  • Corn prices are expected to rise in the coming week on strong demand by China heightened by a domestic corn deficit, as Brazil deals with dry weather and 2021 U.S. crop germination stalls due to cold weather.

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Fixed Income and Money Market 

Money Market

System liquidity opened the week with a deficit of N274.0bn indicating a liquidity squeeze in the market which causes double-digit money rates.


Funding rates rose significantly at the close of the week. Open Buyback (OBB) closed at 27.5% while Overnight (O/N) rates closed at 27.75% indicating a Week-on-Week (W-o-W) rise of +73.17% for OBB and +65.67% for O/N rates.


Money Market Rate




% Change









Source: FMDQ, Proshare Research


Funding rates are expected to continue to trend in the double-digit as liquidity remains constrained.


Treasury Bills Market

The overall trading activity for the Nigerian Treasury Bills for the most part was quiet this week.


At the close of the week, the average benchmark yield for T-bills was flat to close at 4.74% while OMO bills rose +2.29% W-o-W to close at 7.91%. Yield for CBN’s Special bills also rose slightly by +1.07% W-o-W to close at 6.64%


Average Benchmark Yields



% Change

T. Bills (%)




OMO Bills (%)








Source: FMDQ, Proshare Research


The CBN offered and sold N20 billion worth of OMO notes today. The offer was over-subscribed. The 96-day, 180-day, and 348-day notes were allotted at 7.00%, 8.50%, and 10.10% respectively.


FGN Bond Market

The Bond market sustained its relatively quiet trend at the start of the week with selling seen on the short to mid-point of the curve, which was maintained through the week.


At the close of the week, the market was bearish with selling interest seen majorly at the short and mid-end of the curve.


The overall average benchmark yields closed at 8.80% for the week which increased W-o-W by +6.16%.


Average Benchmark Yields



% Change

Short Tenor (%)




Mid Tenor (%)




Long Tenor (%)




Source: FMDQ, Proshare Research 


FGN Eurobond Market

The Eurobond market was relatively quiet at the beginning of the week with minimal volumes seen across the board as investors anticipated the outcome of the US FED meeting and OPEC. However, at the end of the week activity in the Eurobond market picked up as Oil prices rose to their highest level in six weeks on the back of the brighter outlook for the American economy and oil demand.


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.


Foreign Exchange Market

On a W-o-W basis, the Naira appreciated against the dollar at the BDC window, however, against the British Pound and Euro the Naira was bearish. At the I & E FX window, it was flat. 


It depreciated against the British Pound by -0.60% while against the Euro it depreciated by -0.69%. Against the dollar, it appreciated by +0.62% at the BDC window.


The Naira closed the week at $/N410.00 at the I&E FX window, at the NAFEX (spot market) it closed at $/N410.04, and at the BDC market, it closed at $/N482, £/N674, and Euros/N583. 

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Nigerian Capital Market

  • The Nigerian bourse closed the week positive with a growth of +1.36%. The Nigerian Stock Exchange gained N279.55bn in Market capitalization W-o-W while YTD return and market capitalization currently stands at -1.08% and N20.85trn respectively.
  • The volume and value of stocks traded on the exchange this week advanced by +17.82% and +6.46% respectively. A total turnover of 1.44m shares worth N10.88bn in 19,614 deals was traded this week by investors on the floor of the Exchange.
  • Performance across sectors tracked was mixed this week as the NSE Insurance was the highest gainer for the week with +3.80% while NSE-IND, NSE-30, NSE Oil & Gas advanced by +2.36%, +2.03% and +1.30% respectively while NSE Consumer Goods and NSE Banking closed the week negative with -0.02% and -2.09%.

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Chart 1: Movement of NSEASI Index Points 23 Apr. 2021 - 30 Apr. 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 789.89 points and N561.46bn with a growth of +0.60% and +0.60% respectively.



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Dangote and Toni Index 


Dangote Index closed the week negative with 114.99 basis points from 116.78 basis points recorded the previous week, a decline of -1.53%.


NASCON closed flat, DANGCEM and DANGSUGAR declined by -1.36% and -4.75% WoW resprectively. DANGSUGAR recorded the highest decline



Table 2: Dangote Index W-o-W Change


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Furthermore, the Toni Index closed negative with 91.32 basis points from 91.07 basis points recorded the previous week, a W-o-W decline of -0.27%


AFRIPRUD, TRANSCORP and UBCAP closed the week positive with +7.55%, +12.50% and +3.14% respectively, UBA closed negative WoW with -2.67% while TRANSCOHOT closed flat WoW.


Table 3: Toni Index W-o-W Change

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As we advance further into Q2 2020, we expect investors to be cautious of Q1 2020 corporate earnings, press releases from listed companies and macroeconomic developments to make investment decisions.


In addition, we expect investors’ to monitor the movement of yields in the fixed income market.

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Latest Reports This Past Week

1.      Banking Sector Records 3.46bn Volume of Transaction in Q4 2020 - NBS

2.     Average Price of 1kg of Tomato Decreased by -0.64% MoM in March 2021 - NBS

3.     Average Price of 1kg of Tomato Decreased by -0.64% MoM in March 2021 - NBS

4.     Average Fare for Bus Journey Within City Increased by 4.42% MoM in March 2021 - NBS

5.     N1.31trn Generated as IGR in 2020 - NBS

6.     Headline Inflation Increases by 18.17% YoY In March 2021, 0.82% Higher Than February 2021 Rate - NBS

7.     NBS Publishes COVID-19 Impact Monitoring Survey Report for February 2021

8.     Real Household Consumption Expenditure Growth Rate Stood at 0.18% in 2020 - NBS

9.     All Commodity Group Import Index Grew By 0.13% in Q4 2020 - NBS

10.  38.60% of Nigeria's Total Public Debt Was External in Q4 2020 - NBS

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