Weekly Economic and Financial Commentary – WE 7th June, 2019


Saturday, June 08, 2019  / 07:58PM / By ARM Research 


Global Economy

This week, the Fed chairman signaled an openness to rate cut, following the recent development around trade war. He guided that the Fed will closely monitor its implication on growth and act appropriately to sustain an expansion in the economy. Also, U.S jobs data released today shows that employers added only 75,000 jobs in the month of May, a slowdown from an average of 161,000 new jobs, since the start of the year. The jobs data further raises concern on growth which brings the FOMC one step closer to a rate cut. Elsewhere in the Eurozone, preliminary estimates released by Eurostat showed a further decline in inflation rate to 1.2% in May from 1.7% recorded in the previous month, driven by declines in energy prices and services. Consequently, the ECB left rates unchanged at the policy meeting held this week and extended its earliest date for a rate hike to mid-2020 (previously year-end).


Domestic Economy 

Data released by the National Bureau of Statistics revealed Nigeria’s trade surplus in Q1 2019 contracted by -53.2% YoY to N832 billion, largely driven by an expansion in imports. Over the period, imports expanded by 25.8% due to increased purchase of machinery which offset the decline in mineral products. Also exports declined by 3.9% YoY to N4.5 trillion, mirroring declines in crude oil exports (-5.67% YoY) which neutered growth in non-oil exports (+1.65% YoY). Elsewhere, the World Bank recently revised Nigeria’s GDP growth lower to 2.1% in 2019 from its prior estimate of 2.2%. This was due to concerns regarding supply disruptions in the oil sector and lack of reforms to spur new capacity. That said, the world bank estimates growth to be stable over 2020 before strengthening to 2.4 percent in 2021.



In a twist of events, the Nigerian Bourse closed the week negative with the NSE ASI shedding 2.05% WoW to close at 30,432.13 points, with market capitalization dropping by N449.16 billion. The bearish sentiment was spurred by  losses recorded across all sectors; Banking (-0.96%), Cement (-5.13%), Construction (-5.44%), Personal care (-2.62%), Food (-1.69%), Insurance (1.48%) and Oil & Gas (-11.90%). Dissecting the sector performance reveals selloff across various stocks such as GUARANTY: -3.80%, DANGCEM: -5.26%, PZ: -9.26%, UNILEVER: 0.16%, DANGSUGA: -12.88%, SEPLAT: -6.64% and MTN: -0.33%.


Fixed Income

Over the course of the holiday-shortened week, average fixed income yields expanded 84bps WoW to 13.78%, following yields uptick at both ends of the curve. Notably, the apex bank conducted OMO auction twice this week taking up N476 billion from the system which more than outweighed inflow of N177 billion OMO maturities. As a result, average NTB yields closed the week 134 bps higher WoW to 13.29%, with yields expanding across the 91-day (+176 bps WoW), 182-day (+109 bps) and 365-day (+117 bps) bills. At the other end of the curve, average bond yields rose by a relatively smaller margin of 34bps to 14.28%. This was led by sell-offs in the shorter tenured issuances with the JUN 19, FEB 20 and JUL 21 closing higher by 149bps, 103bps and 73bps respectively.  


Take-Away For The Week

Trend in Nigeria’s Trade Balance 

This week, we feature the Q1 19 trade data released by the National Bureau of Statistics which showed decline in trade balance by 53% YoY to N832 billion, following a jump in imports (+26% to $3.7 trillion) and dip in exports (-4% YoY to $4.5 trillion).



Proshare Nigeria Pvt. Ltd.

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


Nigeria: Economic Dashboard @ 070619  


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 31st May, 2019

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

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

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

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

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

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

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

Proshare Nigeria Pvt. Ltd.

Related News

1.       What To Expect From The Markets This Week - 100619

2.      An OPEC plus Extension Is All But Certain – OIR 070619

3.      LIRS Issues Public Notice on TIN Registration; To Leverage On The Existing BVN Operations

4.      NASD OTC Market CAP Increased By 0.63% WoW To Close At N541.24bn

5.      Market Review and Round-Up of Corporate News Announced During The Week Ending 070619

6.      One Week After: OANDO Share Dropped By -4.76% WoW, -20% YTD

7.      Headline Inflation To Inch Up To 11.38% in May 2019 - FDC

8.     Inflation Rate May Rise to Highest Level Since January 2019 - FSDH

9.      Investors Lose N282.16bn WoW As NSEASI Dips By -2.05% To Close The Week Negative

10.  Corporate Earnings For The Week Ending 070619 – PRESCO Declares N2.14bn PAT in Q1 2019 Results

11.   Ecobank Hosted by London Stock Exchange After Successful $500m Eurobond Issuance

12.  South Africa's Rand Continues To Tumble On Central Bank Worries

13.  Dangote Cement Plc Series 8, 9 and 10 Commercial Paper To Open Soon

14.  Chief Sena Anthony and Mr. Oghogho Akpata Resign From OANDO’s Board Effective June 3rd, 2019

15.   Nigeria’s Merchandise Trade Grew Marginally By 2.50% QoQ in Q1 2019

16.  NSE Launches X-Academy e-learning to Provide Quality and Affordable Learning Experience

17.   Nigeria in 1min: Economic, Business and Financial Headlines – 070619

18.  SIFMA Statement On The SEC’s Final Regulation Best Interest Rule

19.  SEC’s Outlook On Recent Legal Decisions Impacting Enforcement Effort And Relationships With Partners

20. SEC Adopts Rules to Enhance Protections and Preserve Choice For Retail Investors In Dealings

21.  Insurance Recapitalization in Nigeria: What Policyholders Should Do Now!

22. South Africa’s Economic Slump-A Huge Signal for Structural Reforms

23. Explanatory Statement By UBN On The Proposed Reduction Of Share Premium Account

Proshare Nigeria Pvt. Ltd.    



Proshare Nigeria Pvt. Ltd.

Related News