Weekly Market Update

Commodities
The commodities under our radar closed in a positive territory (safe Gold) last week with Brent gaining the highest as demand for oil keeps building up due to gradual easing of lock-downs by countries. Brent grew by 7.71% to close the week at $37.84/barrel while WTI spiked by 5.24% to close at $35.32/barrel. Gold and Silver recorded WoW performance of -0.23% and 5.14% respectively. The price of Copper inched up by 1.71% to close the week at $5,332.25 while Natural Gas grew by 5.14%.

Fixed Income
At the bond market, trading was bullish when compared to the previous week, even as trading was tepid for most of the week. Accordingly, the average yield contracted by 30bps to close at 10.1%. At the May 27th Treasury bill auction, the CBN raised N59.37 billion amid healthy demand. The 364-Day bill ended up closing at a higher rate of 4.02% when compared to the previous stop rate of 3.84%. The 91-Day and 182-Day rate however closed slightly lower by 5bps and 13bps to 2.45% and 2.72% respectively.

Equities
The NSE ASI closed the week on a positive note, appreciating marginally by 0.25% WoW to close at 25,267.82bps while market capitalization at the end of the week was N13.168 trillion. Neimeth International Pharmaceuticals Plc led the gainer’s chart with 31.40% price gain WoW, while the loser’s chart was topped by Regency Assurance Plc. The stock price declined by -13.04% to close the week at N0.20/share.

Global Markets
All global indices under our radar ended the week in a positive territory. While NASDAQ inched up by 1.50%, S&P500 increased by 3.01% and DOW30 increased by 3.75%, perceived to be market reaction towards the positive result from experimental COVID-19 vaccine. In London, the FTSE100 closed the week at 2.42% WoW while the German DAX ended the week at 4.63% WoW.

Foreign Exchange
The CBN official exchange rate closed flat last week to N361/$, while the I&E Exchange depreciated by 0.10% to close the week at N386.33/$ from N385.94/$.

Weekly Gist

• Nigeria’s GDP Grew by 1.87% YoY in Real Terms in Q1 2020
Based on the Q1 2020 GDP report released by the NBS, Nigeria’s Gross Domestic Product (GDP) grew by 1.87%(year-on-year) in real terms. This performance was recorded against the backdrop of significant global disruptions resulting from the COVID-19 public health crisis, a sharp fall in oil prices and restricted international trade. The performance recorded in Q1 2020 represents a drop of -0.23% points compared to Q1 2019 and -0.68% points compared to Q4 2019, reflecting the earliest effects of the disruption, particularly on the non-oil economy.

• CBN Sells N59.37 Billion at the May 27 Treasury Bills Auction
At the May 27 NTB auction, the CBN offered N59.37 billion for sale while total subscription was N130.56 billion representing over-subscription rate of c.120%. The CBN decided to raise exactly the amount it offered and the 364-Day bill ended up closing at a higher rate of 4.02% when compared to the previous stop rate of 3.84%. The 91-Day and 182-Day rate however closed slightly lower by 5bps and 13bps to 2.45% and 2.72% respectively.

• CBN MPC Reduces MPR by 100bps to 12.50%
At its third MPC meeting of the year, the CBN reduced the MPR by 100bps to 12.5%, citing the need to rapidly stimulate aggregate demand in a bid to accentuate a fast recovery of the economy and possibly avoid prolonged contraction in economic activity as measured by GDP. The committee voted to maintain the Cash Reserve Ratio (CRR) at 27.5%, Liquidity Ratio at 30% and asymmetric corridor around the MPR at +200/-500bps.

Download full report here Weekly Market Update 29052020