NGX ASI Surged 5.49% WoW Highest in 5 Months, driven by Sustained Buy-Interest in FTNCOCOA, UNITYBNK, and STERLINGNG.

The Nigerian bourse last week increased by 5.49% driven by sustained buy-interest in FTNCOCOA (+45.16%), UNITYBNK (+41.67%) and STERLINGNG (+29.39%) sustained bullish performance. Hence, at 59,000.96 points the equities market Year-to-Date return increased to 15.12% as market capitalization appreciated by N549million to close at N32.13trillion

Market breadth (a measure of investor sentiment) strengthened in the just concluded week increasing from 1.93x to 3.21x, as 77 stocks appreciated against 24 stocks that depreciated in share prices.  FTNCOCOA and UNITYBNK rose by 45.16% and 41.67% to top the gainer’s chart WoW respectively, while TIP and JOHNHOLT led the top losers, falling by 25.00% and 17.86% WoW respectively.

The activity level strengthened as the total traded shares volume and value increased by 94.98% and 35.24%. A total turnover of 4.27bn shares worth N62.17bn in 44344.00 deals were traded last week.

Trading in the top three equities namely United Bank for Africa Plc, Guaranty Trust Holding Company Plc and Access Holdings Plc (measured by volume) accounted for 1.475 billion shares worth N27.648 billion in 8,875 deals, contributing 34.50% and 44.47% to the total equity turnover volume and value respectively.

Outlook for the week

We expect investors to continue to take bullish stance in the equities market, driven by the Oil & Gas sector on the back of the rising energy prices and the Banking sector.

Nigerian Fixed Income Market

The Bond market experienced a quiet outing, as three of the five tenor yields under coverage closed flat. While the yields on the 1 and 30-year bonds advanced by 15bps and 2bps Wow respectively. The yields on the 3, 5, and 10-year bonds closed flat.

In the secondary market, there was a quiet outing in the Nigerian Treasury Bills Market as the yields on the 91 and 182-day papers, closed flat at 4.49 and 5.80 respectively. While the yield on the 364-day paper compressed by 1bp.

In the Money Market space, the Open Repo (OPR) rates decreased to 11.60, while Overnight (ON) rates remain unchanged at 12.10.

Outlook for the week

We expect the Fixed Income Market to lip following investors’ quest to diversify portfolio and rebounding investors’ confidence.

Global and African Market

The Global Market experienced bullish sentiments last week as all of the six indices under coverage appreciated WoW.

In the African Market, there was bullish sentiment as three of the four indices under our coverage appreciated WoW. The NGX ASI, EGX30, and S’A JALSH rose by 5.49%, 2.06%, and 2.00% Wow respectively. Conversely, the KENYA NSE, the only laggard fell by 5.19% Wow.

Outlook for the week

We expect Market activities to continue a bullish drive, driven by improved economic activities, relative stability in the banking sector, and improved investors’ confidence.

IN CASE YOU MISSED THESE

INFLATION: Rise in Food Prices Pushes Nigeria’s Inflation to 22.41% in May 2023.

The Nigeria Bureau of Statistics (MBS) says that the headline inflation rate for Nigeria in May increased to 22.41% relative to the April 2023 figure of 22.22%. This was contained in the report released by the statistics office on last Thursday, June 15, 2023.

Looking at the movement, the May 2023 inflation rate showed an increase of 0.19% points when compared to April 2023 headline inflation rate. Similarly, on a year-on-year basis, the headline inflation rate was 4.70% points higher compared to the rate recorded in May 2022, which was (17.71%). This shows that the headline inflation rate (year-on-year basis) increased in the month of May 2023 when compared to the same month in the preceding year (i.e., May 2022). https://pfi-ltd.com/2023/06/15/inflation-rise-in-food-prices-pushes-nigerias-to-22-41-in-may-2023/

Nigeria officially floats naira as I&E rate hits N755/$

Nigeria has officially floated its naira currency after years of sticking with a hard peg that spooked investors and drained dollars from the economy. The Investors & Exporters (I&E) window is now quoting a range of between N750 and N755/$, according to customers who cited emails received from their banks. https://businessday.ng/news/article/nigeria-officially-floats-naira-as-ie-rate-hits-n755/

Global and Emerging Market Economic Update 

U.S. inflation slows again, CPI shows and might keep Fed on the sidelines

The yearly rate of inflation slowed to 4% from 4.9%, marking the lowest level since March 2021. Grocery and gas prices have been on the wane after helping drive up inflation last year.

Rate of U.S. inflation is slowing Increase in consumer price index over the past 12 months Source: Labor Department, Haver Analytics Note: Seasonally adjusted. https://www.marketwatch.com/story/inflation-slows-again-cpi-shows-and-might-keep-fed-on-sidelines-5137bc46

Ghana inflation rises to 42.2% year on year in May

Ghana’s consumer inflation accelerated slightly to 42.2% year on year in May, up from 41.2% in April, the statistics service said on Wednesday.

The West African nation is grappling with its worst economic crisis in a generation and is restructuring its debt. Inflation reached a more than two-decade high of 54.1% in December, but it declined for the fourth consecutive months up to April. https://www.reuters.com/world/africa/ghana-inflation-rises-422-year-year-may-2023-06-14/

China’s producer prices plunge the most in seven years as deflation hangs over the economy

Inflation in China stayed at low levels in May, as the economy struggles to recover even after its strict Covid lockdown measures were lifted late last year.

The Producer Price Index in May fell 4.6%, marking the steepest year-on-year drop in seven years, when producer prices saw a year-on-year drop of 7.2% in May 2016.

The latest reading fell further from a decline of 3.6% in April and lower than expectations to see a decline of 4.3% in May, according to a Reuters poll of economists to economists. https://www.cnbc.com/2023/06/09/chinas-inflation-rises/falls.html