February 23, 2018/InvestmentOne Report
Please click to download the Weekly Report for the week ending Friday 23rd February 2018
Global Economy
· Sentiment towards the South African economy improved in the outgone week following the appointment of Cyril Ramaphosa as the President, following the resignation of Jacob Zuma. Also, during the week the Office of National Statistics revised the UK’s Q4 2017 GDP growth down by -10basis points to 0.40% q/q bringing 2017 GDP growth rate to 1.7%y/y, weakest in five years. This would place the UK trailing behind developed peers like Germany, France and USA with 2017 GDP growth rates of 2.2%y/y, 1.9%y/y and 2.3%y/y respectively.
Nigerian Economy
· Recently, the International Development Association (IDA) of the World Bank Group approved a loan of US$486million for the rehabilitation and upgrading of electricity transmission substations and lines in Nigeria. In another development, the Federal Government plans to announce private investors in the refinery in the coming Month (March, 2018).
Equities Market
· Although the Nigeria equities market printed in positive territories four times out of the five trading sessions of the week, NSE-ASI shed -0.16% week-on-week as the market could not fully recover from the -1.53% loss on Monday.
Money Market
· Despite CBN’s sales of N119bn worth of OMO bills in the outgone week, the OBB and O/N rates fell by -617ps and -708bps to close at 11.50% and 12.42% respectively. This may not be unconnected with the improvement in system liquidity following the maturity of N56bn worth of OMO bills as well as CBN’s silence on OMO auction in earlier days of the outgone week.
Bond Market
· The bond market was bearish in the outgone week as yields increased across most tenors.
Foreign Exchange Market
· The NGN traded within the N305-306 levels through the week following CBN’s intervention sales of a total of US$210m to the various segments of the FX market.
The Week Ahead
Nigeria
· The Nigerian Bureau of Statistics (NBS) will release Nigerian Gross Domestic Product (GDP) on the 27th of February 2018.
· The CBN will release manufacturing PMI on the 1st of March 2018.
United States
· There will be a 3-month and 6month bill auction on 26th of February 2018.
· There will be a 4-week and 52-week bill auction on the 27th of February 2018.
· The Federal Reserve will release GDP growth for Q4 2017 on the 28th of February 2018.
Japan
· The Ministry of Finance will release the capital spending for Q4 2017 on the 1st of March 2018.
· The ministry of Internal Affairs and Communication will release unemployment rate for January 2018 on the 2nd of March 2018.
China
· The National Bureau of Statistics of China will release manufacturing PMI on the 28th of February 2018.