Weekly Economic and Financial Commentary – WE 24th May, 2019

Proshare

Saturday, May 25, 2019  / 07:10AM / By ARM Research 

 

Global Economy

Earlier today, UK’s prime minister Theresa May announced her decision to resign from office on June 7th after several failed attempts to reach a Brexit deal since her resumption of office in 2016. This poses a new challenge, as it increases the uncertainty regarding Britain’s exit from EU. Following the announcement, while trading in GBP/USD was volatile (touching a fourmonth low of 1.2605), market closed positive with the FTSE 100 closing higher by 0.6%. That said, deadline for Brexit is set for October 31st. Meanwhile, data released by the National Statistics in UK showed there was an uptick in April inflation by 2bps to 2.1% YoY, buoyed by a rise in energy prices. The higher energy prices reflects the response from energy providers to a 10% increase in the country’s energy price cap, which took effect in April 1st. 

 

Domestic Economy 

NBS released Nigeria’s Q1 GDP data which revealed an expansion in the economy by 2.01% YoY in Q1 2019, as a result of improved activities in the non-oil sector (+2.5% YoY), outweighing continued contraction in the oil sector (-2.4% YoY). The Agric sector (+3.2%) and services (+3.1% YoY) which accounts for a large part of the non-oil sector led the momentum. Elsewhere, the MPC held its third meeting of the year this week where most members voted to leave all policy parameters unchanged (9 out of 11). The committee noted the uptick in inflation over the month of April and therefore sought to taper inflationary pressures. At the same time, the committee cited that despite the growth in Q1 2019, actual output continued to remain below the economy’s long run potential.

 

Equities

The Nigerian Bourse closed positive for the second consecutive week with the NSE ASI appreciating 6.96% WoW to close at 30,881.29 points and market capitalization gaining N885 billion. The bullish sentiment was spurred by the two largest stocks in the Exchange – MTNN (+28.56% WoW) and DANGCEM (+13.64% WoW). Conversely, a close evaluation of the market performance showed negative performance across all sector(s), excluding cement sector which gained 13.12% WoW. Dissecting the sector performance reveals selloff across various stocks such as FLOURMILLS: -12.10%, UACN: -11.64%, ACCESSBANK: -10.08%, NB: -7.20%, UBA: -4.17%, UNILEVER: -3.13%, ZENITH: -3.06% and NESTLE: -2.10%.

 

Fixed Income

After going two weeks without an OMO sale, the CBN sold N360 billion worth of OMO bills this week. However, OMO rates continued their downward trend this week with the one-year rate falling for the 5th straight auction to 12.5% (vs 12.82% last auction). Consequently, average NTB yields closed the week flattish at 12.18%. At the bond leg, FG sold N111 billion worth of FGN bonds at a lower stop rate at this week’s bond auction (-34bps MoM to 14.28%). Given the lower allotment relative to subscription levels (N373 billion), investors resulted to filling their coffers at the secondary market with yields dipping 9bps WoW to 13.94%. Overall, following depression at both ends of the curve, average fixed income yields plunged 4bps WoW to 13.06%.

 

Take-Away For The Week

GDP trend

This week, we feature the performance of the economy over the last two years, revealing trend oil, non– oil and Real GDP.

 

Proshare Nigeria Pvt. Ltd.

 


Research 234 (1) 2701653  research@armsecurities.com.ng

 

Nigeria: Economic Dashboard @ 240519 

 

 

Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.

 

Proshare Nigeria Pvt. Ltd.

 

Do you wish to be included in the Events Calender? 

Kindly email business@proshareng.com or/and market@proshareng.com Tel: 0700PROSHARE (070077674273) to share information about your Business, Economic and Financial Markets event.

 

Proshare Nigeria Pvt. Ltd.

 

Most Recent Weekly Commentaries

1.       Weekly Economic and Financial Commentary – WE 17th May, 2019

2.      Weekly Economic and Financial Commentary – WE 10th May, 2019

3.      Weekly Economic and Financial Commentary – WE 03rd May, 2019

4.      Weekly Economic and Financial Commentary – WE 12th Apr, 2019

5.      Weekly Economic and Financial Commentary - April 01 - 05, 2019

6.      Weekly Economic and Financial Commentary – WE 22nd March, 2019


Proshare Nigeria Pvt. Ltd.

 

Related News

1.       Why We Are Setting Up An Entrepreneurship Bank

2.      Monetary Policy Decisions Across Africa

3.      Market Review and Round-Up of Corporate News Announced During The Week Ending 240519

4.      Decline in India Export to Push Sugar Prices Up

5.      Foreign Startups Disrupting The Business Of Funerals

6.      Criminal Investigation Initiated Into Bank Shares Fraud Allegations

7.      FCMB Empowers More SME Customers in Season 2 of “Race to China Promo’’

8.     Investors Gain N885.03bn WoW As NSEASI Inches Up By 6.96% To Close The Week Positive

9.      FIRS Recommends A 63-Day Timeline For Completion Of Tax Audit Exercises

10.  4.87bn Litres of PMS Imported in Q1 2019 - NBS

11.   The USA-ChinaTrade War – A Ploy To Colonise China?

12.  Zenith Bank Achieves Feat as First Nigerian Bank To Consecutively Audit Its Carbon Emissions

13.  Moody's Downgrades Zambia's Ratings to Caa2, Outlook Changed to Negative

14.  Pre-University FREE Python and Introductory Machine Learning Classes

15.   ACCION Mfb Records N1.05bn PAT in 2018 FY, Pays 25k Dividend To Shareholders

16.  Nigeria in 1min: Economic, Business and Financial Headlines – 240519

17.   “We are Ecobank #WeKnowAfrica” - Ecobank Nigeria Celebrates ‘Africa Day’

18.  Investors Gain N146.39bn As Market Sentiment Remains Positive; YTD Returns Hit Positive Territory

19.  Singapore is Now Considering Virtual Banking Licenses Too; Here is Why

20. The Impact of US-China Trade Tensions

21.  FAAC Disburses N617.57bn in April 2019 - NBS

22. Nigeria’s GDP Grew By 2.01% YoY In Real Terms In Q1 2019

23. For the Poor, Falling Poverty Numbers Aren’t Always Good News

24. Weekly Economic and Financial Commentary – WE 17th May, 2019

25.  From Recession to Growth: The Story Of Nigeria’s Recovery From The 2016 Economic Recession

26. Headline Inflation Increases By 11.37% YoY in April 2019; 0.12% Higher Than March 2019 Rate
READ MORE:
Related News
SCROLL TO TOP