February 9, 2018/InvestmentOne Research
Please click to download the Weekly Report for the week ending Friday 9th February 2018
Global Economy
· Earlier this week, we saw a significant dip across major equities markets in the world as Dow Jones Industrial Average (DJIA) (-4.83), S&P 500 (-4.24%), FTSE 100 (-1.48%) and Nikkei (-2.61%) all lost on Monday. Similarly, BOE’s hawkish stance sent a signal of imminent hike in rate from the current level of 0.50%. Elsewhere, oil price fell by -7% week on week to USD65/barrel as a result of the surge in US shale production, which reached a four decade high of c.10million barrel per day (mbpd), almost at par with Saudi Arabia’s production volume and close to the Russia’s output of about 11mbpd.
Nigerian Economy
· The Federal Government restated its ambitions to spur growth in the economy by announcing plans to inaugurate a core working group to enhance the implementation of the Economic Recovery Growth Plan (ERGP). While this could be supportive of economic activities over the medium to longer term, the potential increase in output from Bonga oil field, following the brief shut-in, could be a positive for GDP performance in the near term.
Equities Market
· The Nigerian equities market was largely bearish in the outgone week as investors lost c.N540 billion week on week over the last five trading sessions. This may not be unconnected with the panic in the global equities market witnessed during the week as well as the continued moderation in Brent oil prices on the back of a surge in US shale oil production..
Money Market
· Despite Money Market rates expanded this week as OBB and O/N rates jumped +3173bps and +3333bps respectively. This may not be unconnected to the tight system liquidity as CBN mopped a total of N174.48billion via OMO auctions. However, there was an OMO maturity of N68billion that hit the system on Thursday.
Bond Market
· The bond market was bearish this week as we saw sell-off across all maturities. The sell-off was significant on the May 2018 bond as the yield rose by 114bps week-on-week to 15.28%. The total turnover declined by -38% week-on-week to N1.17trillion.
Foreign Exchange Market
· The NGN continued to trade within the N305-306 levels through the week following CBN’s intervention sale of a total of USD210m to the various segments of the FX market.
The Week Ahead
· The National Bureau of Statistics will release Premium Motor Spirit (petrol) Price Watch for the month of January, 2018 on Tuesday, 13th February 2018.
· The National Bureau of Statistics will release inflation report for the month of January, 2018 on Wednesday, 14th February 2018.
· There will NTB auction on Wednesday 14th February where CBN will offer N6billion, N30billion and N140billion of the 91-day, 182-day and 364-day bills respectively.
· There will be OMO maturity of N89.08billion on Thursday, 15th February 2018.
· There will be Nigerian Breweries Plc’s conference call on its 2017 full year results on Friday, 16th February, 2018.
