Nigeria Economy | |
Nigeria Economy | |
1733 VIEWS | |
![]() | |
PROSHARE | |
PROSHARE |
Saturday, December 14, 2019 / 02:00PM / By ARM
Research /Header Image Credit: ARM
Global
Economy
Global
markets closed the week with cheery news after it was announced that US and
China have agreed to an initial trade deal. This deal would see the US cancel
the fresh tariffs ($160 million worth of goods) which were scheduled to go into
effect on Sunday. As part of the deal, the US will also cut existing tariffs by
50% while China will increase its annual purchases of American agricultural
products to about $40billion in 2020. Meanwhile, at its last meeting of the
year, the US Feds voted to keep rates unchanged - in line with consensus
expectation. The committee also indicated that there is less probability for a
rate increase in 2020. Elsewhere, the US inflation for November (2.1%) printed
above the Fed's 2% target for the first time since April. This also printed a
tad higher than analysts' expectations of 2.0%. The higher inflation was driven
by a 2.0% increase in food prices, which offset the slight decline in energy
prices (-0.6%).
Finally, PM Boris Johnson and his
Conservative party won a commanding majority in yesterday's election. Given
their stated desire to get Brexit done, it increases the likelihood of the UK
leav-ing the bloc by the Jan 31 deadline.
Domestic
Economy
Recent data released by the NBS showed
that Nigeria's trade surplus widened significantly by 117% YoY to N1.38
trillion in Q3 2019, due to growth in export (+9% YoY to N5.3 trillion) and a
moderation in imports (-8% YoY to N3.9 trillion). Precisely, while crude oil
exports declined by 10% YoY largely on the back of lower crude oil prices, the
sharp expansion in non-crude oil export by 118% YoY anchored the increase in
total exports. A deeper probe into the numbers revealed buoyant increase in
manufactured goods exports (+14x YoY) fuelled the expansion. No-tably,
re-exports of high value cable sheaths of iron, submersible drilling platform,
Vessels and other floating structures to other African countries, spurred the
increase in manufacturing sector. On the other hand, the deceleration in
imports stemmed from Mineral fuel (-50% YoY), crude and machinery &
transport equipment (-5% YoY).
Equities
The Nigeria's bourse closed the week
negative, shedding 119bps to close at 26,536.21 pts with market capitalization
losing N154.1 billion. This week's decline was spurred by Telecom (-1.54%),
Banking (-1.23%), Cement (-1.80%), Food (-1.27%) and Personal care (-2.61%)
sectors. Sell offs were seen in MTNN (-2.29%), GUARANTY (-2.34%), STANBIC
(1.90%), UBA (-1.49%), FBNH (-2.26%), DANGCEM (-1.89%), CCNN (-2.08%), UNILEVER
(-2.38%) and NESTLE (-3.70%) WoW, muting gains in NB (+2.93%) and GUINNESS
(+1.72%) amongst others.
Fixed
Income
The bulls
resurfaced in the NTB market, with average yield declining 101bps to close the
week at 6.28% amid pent up system liquidity. The lower yields stemmed from
increased demand across tenors, with the short-tenor bills declining the most
by 140bps WoW. At the bonds market, average yields fell by 77bps WoW to 10.72%.
The biggest declines were seen at the short termed in-struments: Feb-2020
(-175bps), Jul-2021 (-135bps) and Jan-2022 (-88bps). Overall, average fixed
income yields fell 89bps WoW to 8.50%.
At the NTB auction, subscription came in very strong— 6.5x the N45 billion offered. Irrespective, the FG simply rolled-over the N45 billion that was maturing. Average PMA rates suffered yet another steep decline by 135bps to 6.02% with the 1-year stop rate printing 149bps lower to 6.88%.
Take-Away
For The Week
Nigeria's Trade Balance (N'billion)
This
week, we feature the trend in Nigeria's trade balance over the past three
years. A quick look at the chart below revealed over Q3 19, Nigeria recorded
its highest trade surplus since Q3 2018 owing to an increase in total value of
exports and a slight moderation in imports in Q3 2019.
Research 234
(1) 2701653 research@armsecurities.com.ng
Nigeria: Economic Dashboard @ 131219
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.
Most Recent Weekly
Commentaries
1. Weekly Economic and
Financial Commentary - Week Ended Nov 22, 2019
2. Weekly Economic and Financial Commentary - Week Ended
Nov 08, 2019
3. Weekly Economic and
Financial Commentary - Week Ended Nov 01, 2019
4. Weekly Economic and
Financial Commentary - Week Ended Oct 25, 2019
5. Weekly Economic and Financial Commentary - Week Ended
Oct 18, 2019
6. Weekly Economic and
Financial Commentary - Week Ended Oct 04, 2019
7. Weekly Economic and
Financial Commentary - Week Ended Sept 27, 2019
8. Weekly Economic and Financial Commentary - Week
Ended, Sept 20, 2019
9. Weekly Economic and
Financial Commentary - WE 13 September 2019
10. Weekly Economic and Financial Commentary - WE 16
August 2019
Related News
1.
Lagos Business School Set to Host the 2020 Africa
Academy of Management Conference
2.
Market Review and Round-Up of Corporate News
Announced During The Week Ending 131219
3.
NASD OTC Market CAP Increased By 0.14% WoW To Close
At N498.04bn
4.
SSA Growth Story: Unsynchronized
5.
Oando Plc Announces the Successful Signing of Two Gas
Supply Agreements with NLNG
6.
Proshare Chairman Olufemi Awoyemi Receives 2019
Institute of Service Excellence Award
7.
Investors Lose N154.12bn WoW As NSEASI Dips By -1.19%
To Close The Week Negative
8.
IOSCO Launches Framework For Monitoring Leverage In
Funds That May Pose Stability Risks
9.
CRC Credit Bureau Ltd 10th Anniversary Forum Examines
Credit Penetration In Nigeria
10.
Gloomy Economy, Low Rates Put Pressure on Western
European Banks
11.
Evaluation of The Bank Of England's Research
12.
Unemployment: Senate Calls For A State Of Emergency
13.
Sanctity of Contracts, Key To Attracting Capital
Investments Into Nigeria - Soji Apampa
14.
Nigeria's Merchandise Trade Grew In Q3 2019 With
Higher Exports And Lower Imports
15.
Nigeria in 1min: Economic, Business and Financial
Headlines - 131219
16.
NEITI Launches Beneficial Ownership Portal
17.
Central Bank Digital Currencies: 4 Questions and
Answers
18.
Lower Exports From India To Drive Sugar Prices Up
19.
NSEASI Firms Up Further By 0.51% As Market Sentiment
Remains Positive
20.
Court Sanctions Scheme of Arrangement Between Eland
Oil and Gas And SEPLAT
21.
Invest in FGN Monthly Bond Auction - December 2019
22.
Real Estate: Declining Credit Reflects Underlying
Weakness
23.
Flour Mills of Nigeria Series 11 Commercial Paper
Closes Today December 12th, 2019