Weekly Economic and Financial Commentary - Week Ended Nov 22, 2019


Saturday, November 23, 2019 / 05:00PM / By ARM Research / Header Image Credit: ARM Research 


Global Economy

Japan's trade balance improved to a surplus of Y17.3 billion in October from a deficit of Y456.3 billion in same period last year. This is the first trade surplus in four months but printed short of consensus expectation of Y300 billion surplus. The improvement arose from a faster drop in imports (-14.8% YoY) than exports (-9.2% YoY). Specifically, the drop in exports (for the 11th con-secutive month) and the decline in imports (for the 8th month) were largely due to lower sales and purchases from US and China. Meanwhile, annual inflation in Japan remained flat at 0.2% YoY in October despite a sales tax hike from 8% to 10%. Increase in prices of alcoholic beverages and in meals outside demonstrated the tax effect but was suppressed by the decline in energy prices. Over in the EU, manufacturing PMI increased in November to 46.6 (October: 45.9) but remained in contraction territory, according to preliminary data. This is a 3-month high and came as both Germany (43.8 vs 42.1 index ppts in September) and France (51.6 vs 50.7 index ppts in September) recorded improvements while the UK (48.6 vs 50 index ppts in September) slipped slightly deeper into contraction from October.


Domestic Economy 

Data released by NBS revealed the Nigerian economy expanded by 2.28% YoY in Q3 2019 buoyed by improvement in both the oil (+6.5% YoY) and non-oil (+1.8% YoY) sectors. Specifically, improved activities were observed in services (+3.5% YoY), Agric (+2.3% YoY), Oil (+6.5% YoY) and manufacturing (+1.1% YoY) sectors. Elsewhere, inflation for the month of October came in higher at 11.61% YoY, +37bps increase from prior month, marking the second consecutive increase since the border closure. Specifically, food inflation rose by 57bps to 14.07% with Farm produce (+87bps to 14.77% YoY) leading the pack. Stripping out volatile food prices, core inflation came in 6bps lower to 8.88% YoY owing to subdued energy prices.



For the third consecutive week, the Nigerian bourse ended the week in green with the ASI advancing +52bps WoW to close at 26,991.42 pts. However, market capitalization lost N43.8 billion due to delisting of Dangote Flour Mills Plc from the NSE. Breweries (+4.19%), Food (+7.01%), Banking (+0.89%), Oil & Gas (+4.75%), Insurance (3.87%) and Construction (+1.28%) sectors spearheaded the gains, outweighing losses in Cement (-0.50%) Telecom (-1.49%) and Personal Care (-4.42%) sectors. On stock performances, NB (+4.12%), GUINNESS (+8.39%), NESTLE (+8.70%), DANGSUGA (+8.97%), GUARANTY (+1.38%), STANBIC (+5.26%) recorded gains muting declines in DANGCEM (-0.35%), AIRTELAF (-2.99%) and UNILEVER (-5.68%) WoW amongst others.


Fixed Income

NTB yields closed each day of the week lower, culminating in a 224bps WoW drop to 8.65% - comfortably its lowest level so far this year. This is a continued effect of the CBN's OMO policy which has thinned out fixed income instruments available for domestic investors and ramped up demand for NTBs. Bond yields were little changed in the secondary market, declining 2bps WoW to 12.19%. However, relative to the prior bond auction, there was more movement in the primary market with average stop rate dropping by 152bps to 12.77%. Demand was still strong at the auction with subscription at 1.68x the N150 billion offering. The FG took full advantage, selling off N252.9 billion, of which N95 billion was sold via non-competitive bids. This is the first time this year.


Take-Away For The Week


Trend in Fixed Income Yields 

This week, we feature the trend in Fixed income yields so far into the second half of the year - specifically NTBs and bond yields. The chart highlights how these yields have performed since the CBN announced its new OMO directive on the 22nd of October.


Proshare Nigeria Pvt. Ltd. 


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

Nigeria: Economic Dashboard @ 251119  

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 - Week Ended Nov 08, 2019

2.     Weekly Economic and Financial Commentary - Week Ended Nov 01, 2019

3.     Weekly Economic and Financial Commentary - Week Ended Oct 25, 2019

4.     Weekly Economic and Financial Commentary - Week Ended Oct 18, 2019

5.     Weekly Economic and Financial Commentary - Week Ended Oct 04, 2019

6.     Weekly Economic and Financial Commentary - Week Ended Sept 27, 2019

7.      Weekly Economic and Financial Commentary - Week Ended, Sept 20, 2019

8.     Weekly Economic and Financial Commentary - WE 13 September 2019

9.     Weekly Economic and Financial Commentary - WE 16 August 2019

10.  Weekly Economic and Financial Commentary - WE 09 August 2019

11.   Weekly Economic and Financial Commentary - WE 02 August 2019

12.   Weekly Economic and Financial Commentary - WE 26 July 2019

13.   Weekly Economic and Financial Commentary - WE 19 July 2019

Proshare Nigeria Pvt. Ltd. 

Related News

1.      What To Expect From The Markets This Week- 241119

2.      Dangote Flour Mills Plc Delisted From The Daily Official List of NSE

3.      Market Review and Round-Up of Corporate News Announced During The Week Ending 221119

4.      South Africa's Rate Decision: Giving Priority To Foreign Investors

5.      Cordros Dollar Fund Opens for Subscription On Monday, November 25, 2019

6.      NSEASI Inches Up By 0.52% WoW To Close The Week Positive

7.      First Gem Promotes Wealth Creation for Women In Nigeria - Adesola Adeduntan

8.      Northcourt to host Lagos Property Auction on November 29, 2019

9.      CBi with Action Aid and LCCI to Unveil a MSME Web-based Solution for Ethical Compliance

10.   Spectacle as Zenith Bank Lights up Ajose Adeogun Street, Victoria Island, Lagos

11.   November 2019 FGN Bond Auction Oversubscribed

12.   FIDELITYBK 9M 2019: Write-Back Supports Earnings Growth

13.   How EDTech Intends To Improve Learning Methodologies in Nigeria

14.   A Small Uptick In The FAAC Payout To N702bn In November 2019

15.   Cocoa Price At An 18-Month High; Jumped By 12% YTD to $2,640

16.   Nigeria's GDP Grew By 2.28% YoY In Real Terms In Q3 2019

17.   Nigeria in 1min: Economic, Business and Financial Headlines - 221119

18.   Four Collision Courses for the Global Economy - Nouriel Roubini

19.   Oyetola Signs Executive Order Establishing Osun Investment and Promotion Agency to Accelerate Growth

20.   Finance Bill 2019: Tax Implications for Nigerian Entities

21.   Senate Passes Finance Bill, 2019

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.



Related News