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Weekly Market News for Investors in Nigeria

Investors Gain N646.34bn WoW as NGX ASI Inches up by 2.95% to Close the Week Positive

Local Economic Updates

Last week, the Federal Ministry of Agriculture and Rural Development disclosed the unfavourable balance of Wheat importation into Nigeria as the value of Wheat importation exceeds local production by about 1042%.

On the back of the above, the CBN has flagged off its Wheat programme, aiming to reduce wheat importation by 60% in two years and save the country $2 billion annually in foreign exchange. Mr. Edwin Adamu, CBN Deputy Governor, Corporate Services Directorate, added that the programme would benefit over 150,000 farmers.

Elsewhere, multiple BDC operators confirmed a strengthening of the local currency on the parallel market as it significantly appreciated by over 6% to close at N535/$1, giving credence to the view that the Apex bank’s policy actions to stifle speculative activities might be yielding some positive results.

According to the S&P Platts survey, Nigeria’s crude oil production declined by 1.4% to 1.37mpbd in Oct’21, from 1.39mbpd in Sept’21 as a result of the operational setbacks, as key pipelines faced persistent setbacks.

Also, Prof. Umar Dambatta, the Executive Vice Chairman of the National Communication Commission (NCC), projected revenue of N632.39bn is expected in 2022 from the sale of 5G spectrum to telecommunications firms, among other revenue sources. He also assured Nigerians of their health safety with the proposed 5G Network.

Global and Emerging Market Economic Updates

In the past week, the U.S. sent shivers across the global economy as the Labour Department recorded a disturbing inflation reading, with consumer prices scaling to the highest level in three decades. The CPI surged by 6.20% y/y in Oct’21, outpacing estimates of a 5.90% increase, and significantly higher than 5.40% recorded in the preceding month. On a monthly basis, the headline index was up 0.90% as against a 0.60% forecast.

The disturbing components driving the U.S. inflation include energy prices, used vehicle prices, new vehicle prices, food prices, and shelter costs, with these categories surging by 30.00%, 26.40%, 9.80%, 5.30% and 3.50% y/y, respectively.

Elsewhere, in China, the property sector saga continued as Evergrande managed to avoid default at the last minute, fueling speculation about indirect interventions from the Chinese government.

In the oil market, OPEC, in its Monthly Oil Market Report cut down its global oil demand forecast for 2021 by 160,000 bpd to average 96.4mbpd. This downward revision in global oil demand was due to cutbacks in demand expectations from China and India in the final quarter of the year. Also, the bloc remains deviant in turning open the taps on supply to close up a gaping supply deficit that is expected to worsen due to expectations of a closer winter.

In addition, Brent Crude oil declined by 0.69% to $82.17/b amid speculation that the U.S. will release oil from the Strategic Petroleum Reserves to tame the surge in gasoline price.

The Nigerian Equities Market

The NGX ASI closed the week in green by 2.95% despite closing positive in 2 of the 5 trading sessions during the week as a result of buy pressures in bellwether stocks such as AIRTELAFRI (+11.76%) and MTNN (+8.77%). Consequently, at 43,253.01 points, the equities market’s Year-to-Date return improved to 7.41% as market capitalisation increased by 2.92% to close at N22.57 trillion.

Market breadth (a measure of investor sentiment) strengthened but was negative last week, increasing from 0.53x to 0.75x as 27 stocks appreciated against 36 stocks that declined. NEIMETH and REDSTAREX topped the market gainers with 12.50% and 12.18% WoW respectively, while CONOIL and PHARMDEKO were the top laggers with declines of 14.90% and 9.83% respectively WoW.

The activity level strengthened as the trade volume and value increased by 3.01% and 69.25% respectively WoW. A total turnover of 1.471 billion shares worth N20.941 billion in 20,410 deals were traded during the week by investors on the floor of the Exchange. Trading in the top three equities by volume were FBNH, STERLNBANK and UACN. They accounted for 519.011 million shares worth N4.057 billion in 1,787 deals; contributing 35.28% and 19.37% to the total equity turnover volume and value respectively.

Weekly Sectoriral Perfomance of the NGX

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