The US economy grew at a slower pace of 1.9% YoY in Q3 19 (Q2 19: 2%) according to preliminary data released during the week. The softer growth stemmed from declines in PCE (-170bps to 2.9%) and government spending (-280bps to 2%) and printed above analysts' consensus expectation of 1.6%. Meanwhile, the US FOMC, for the third consecutive meeting, voted to cut its benchmark funds rate by 25bps to a range of 1.5% to 1.75% -- in line with consensus. Going forward, the Fed officials hinted at pausing and monitoring the implications of incoming data be-fore deciding on any further rate cuts. Over in Europe, GDP growth came in flat at 0.2% QoQ while CPI declined 10bps YoY in October to 0.7%. This decline came on the back of declines in France (-20bps to 0.9%), Belgium (-40bps to 0.2%) and Luxembourg (-30bps to 0.8%).
According to figures from CBN's Q3 2019 economic report, Nigeria's Fiscal deficit for Q3 2019 declined by 40.2% QoQ and 58% YoY to N379.7 billion. While total retained revenue in-creased over the quarter by 8.72 % to N1.03 trillion (YoY: moderated marginally by 8bps), total expenditure on the other hand declined significantly (-11% QoQ and -27.5% YoY to N1.41 trillion). For context, FG's expenditure moderated over the period-anchored by declines in recurrent (-14.5% QoQ and -44.7% YoY to N884.8 billion) and capital expenditure (-24.7% QoQ to N371.7 billion).
The NSE ASI declined by 21bps WoW to 26,293.3 pts as investors lost N27 billion during the week. Losses in Banking (-1.26%), Telecom (-1.88%) and Food (-1.17%) muted gains in Brewers (+0.58%), Cement (+.219%), Oil and Gas (+15.98%), Personal Care (+0.46%) and Insurance (+0.85%). On stock performances, GUARANTY (-4.18%), STANBIC (-5.41%), UBA (-0.85%), MTNN (-2.71%), NESTLE (-1.65%), UACN (-4.62%) recorded losses, outweighing gains in DANGCEM (+2.40%), NB (+0.98%), SEPLAT (+9.28%) WoW amongst others.
This week, fixed income yields continued their bullish run (average fixed income yields: -58bps WoW to 12.79%) as sentiment tilted towards the buy side following the restriction of local non-banking investors from participating in OMO auctions. Specifically, while average secondary market NTBs dipped 31 bps WoW to 12.42%, the impact was dire at the NTB primary market auction which saw a 110bps declined in average stop rates to 10.48% amidst avalanche of bids (Bid to cover: 4.27x). Similar traits also evolved at the long end of the curve with average Bond yields plummeting 85bps WoW to 13.16%.
Take-Away For The Week
Snapshot of Earning releases in Q3 2019 (N million)
This week, we feature Revenue, PAT, and Earnings per share (EPS) of companies financial results in Q3 2019 relative to the same period in the prior year.
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Nigeria: Economic Dashboard @ 011119
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