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NGXGROUP, UNILEVER, others led Nigerian stocks to close the week positive consequently bringing the Year-to-Date return to an improved 3.71%, while market capitalisation inched up by 0.79% to close at N21.79 trillion.

Local Economic Updates

President Muhammadu Buhari is scheduled to formally unveil the Nigerian Central Bank Digital Currency (CBDC), known as the eNaira, on Monday 25 October 2021, at the Senate House, Abuja. The CBN will further engage various stakeholders as they enter a new age consistent with global financial development. The theme of the eNaira is “Same Naira, more possibilities”.

Also, FBN Holdings notified the public of the acquisition of substantial shareholdings (5.07% – circa 1.82 billion shares from the company’s issued share capital of 35.90 billion shares) by Mr. Otedola Olufemi Peter and his nominee – Calvados Global Services Limited.  As a result, Mr. Otedola has joined the trio of Chief Mike Adenuga (the current Chairman of Globacom), Mr. Tunde Hassan-Odukale (the current Chairman of FBNH) and Oba Otudeko in the race for the control of the holding company. According to market analysis, Otedola, Adenuga, the Hassan-Odukales and Otudeko shareholding are above 5% and this has placed them in a position to control the organisation.

Nigeria’s external reserves crossed the US$40 billion level early in the week, signalling the likelihood that the IMF’s SDR allocation has been fully drawn, and the US$4 billion Eurobond issuance has been factored into the nation’s bourse. Last Thursday, the external reserve level stood at US$40.96 billion, which is the highest level seen since 17th October, 2019.

Global and Emerging Market Economic Updates

In the past week, the Federal Reserve Chair Jerome Powell, said high inflation is likely to last well into 2022 and reiterated that the Fed is on track to commence the tapering of asset purchases. This represents a contrast to the Fed Chairman’s previous posture on inflation being “transitory”.

Also, with the winding out of most enhanced pandemic related benefits, the initial claims for unemployment insurance fell to the lowest since March 2020. In the week ended, first-time filings for jobless claims printed impressively, totaling 290,000 relative to 296,000 recorded in the preceding week, and falling below a 300,000 Dow Jones estimate. Likewise, continuing claims reached yet another all-time low, declining to 2.48 million.

Elsewhere, China’s real estate giant, Evergrande Group, averted a possible debt default due on the 23rd October, 2021. The company was reported to have made an US$83.5 million payment on a U.S. dollar bond on Thursday. Nonetheless, this basically kicks the can down the road, as the real estate giant remains overwhelmed by over US$300 billion in debts, with the next interest payment falling due on the 29th October. The long-term strategic direction for the company is to leverage the growing green movement by prioritizing its electric vehicles business over its struggling real estate business.

In the oil market, the rally continued for the ninth consecutive week (its longest streak since 2015) as the price of Brent Crude hit $85.53/barrel as consumption continues to outstrip supply.

The Nigerian Equities Market

The NGX ASI closed the week in green by 0.78% as it closed positive in 3 of the 4 trading sessions during the week as a result of buy pressures in bellwether stocks such as NGXGROUP (+23.94%) and UNILEVER (+9.85%). Consequently, at 41,763.26 points, the equities market’s Year-to-Date return improved to 3.71% as market capitalisation increased by 0.79% to close at N21.79 trillion.

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