Macroeconomic Review
Nigeria’s GDP- The Silver Lining?
The Africa’s largest economy posted a real gross domestic product of N21.04 trillion, depicting 3.52% growth for Q4 and 3.10% growth for 2022, as revealed by the National Bureau of Statistics. Noticeably, the 3.10% full year result was at par with the World Bank’s estimate, but above the 3.00% IMF estimate. By comparing the year-on-year performance, the Q4 2022 growth rate decreased by 0.47% (3.52%: Q4 2022 vs 3.98%: Q4 2021) but rose by 1.27% relative to 2.25% in Q3 2022, quarter-on-quarter…
Nigeria’s Inflation- Mounting Pressures
January’s inflation figures ushered in the steepest uptick in the general prices of goods and services since August 2022, as the Nigeria’s Consumer Price Index increased by 0.47% to 21.82% in January, from 21.34% in December, year-on-year. Similarly, the food and core inflation also witnessed a sharp jump, with 0.56% increase in food inflation to 21.53% and 0.66% upsurge in core inflation to 19.16%, year-on-year in January…
Fixed Income Market Review and Outlook
Activity in the local fixed income market was mixed overall, as earlier buyside interest due to excess liquidity was dampened mid-month, due to the oversupply at the FGN bond auction, CBN’s Retail FX SMIS and discretionary CRR debits. The latter stages however recorded renewed buyside activity driven by coupon inflows, FAAC and other statutory credits…
Money Market Review and Outlook- Interbank rates expanded amid a relatively liquid market
As expected in our January 2023 prognosis, February recorded lower liquidity numbers amid weak coupon inflows (₦95.6bn), OMO (₦175bn), CBN Special bill maturities, FAAC and other statutory credits. System liquidity averaged ₦447.31bn (vs ₦709.62bn in Jan 2023), and Overnight Policy Rate (OPR) and Overnight (ON) rates expanded to 12.11% and 12.52% from 10.10% and 10.55% in Jan 2023…
T-Bills Market Review and Outlook – Mixed to bearish theme amid liquidity drain and sharp increase in NTB stop rates
Surfeit liquidity drove heightened demand for treasury bills at the start of the month, as investors jostled to deploy their idle cash to available securities amid CBN’s discretionary mop-ups. The buy interest was evident across all tenors, albeit tilted more to the long-dated papers with most trades executed at c.2.50% levels…
FGN Bonds Market Review and Outlook – Mixed theme overall; significant borrowing at the FGN bond auction
Buyside interest dominated the FGN bonds market at the early periods of the month, with the demand skewed to short-dated papers (2024s, 2025s and 2026s) because of the value they portend amid the significantly low rates on bills of a relatively similar duration. For the better part of the month however, most of the activity was skewed to the on-the-run papers (2028s, 2032s, 2037s and 2049s)…
Eurobond Market- Inflation woes spurred selloffs in most markets, albeit occasional bullish pressures were witnessed
The Eurobond space kickstarted the month with a rebound after days of weakness, amid lower ratings of most sovereigns and central banks interest rate decisions. Most SSAs and MENAs papers parred back some of the losses with price appreciation of c.1.25pts, while also awaiting the interest rate decision by the US Fed…
Foreign Exchange Market Review and Outlook – FX reserves decline further; Naira held steady against the dollar at the I&E window
There was a relatively heightened demand for cash trades in the unofficial FX market by political personnel largely due to election, thus rates traded mostly between $/₦750 – $/₦760, while Inflows closed at $/₦756. However, at the official window, NAFEX rate closed at $/₦461.07 in Feb’2023, representing a ₦0.23k appreciation when compared with previous month’s close of $/₦461.30, while there was a ₦0.50k depreciation at the I&E window, as it closed at $/₦462…
Equities Market Performance in February – Despite election uncertainty, the NGX All-Share Index ends February with a profit
The All-Share Index (ASI), which appreciated by 4.82% to close at 55,806.26 points, marked a favorable conclusion for the Nigerian stock market in the month of February 2023. In a similar line, the Nigerian Exchange Limited (NGX) market capitalization which recorded N 28.99 trillion at the start of the month, completed the month of February at N 30.40 trillion, showing a MTD gain of c. N 1.40 trillion for the period…
