February 1, 2019/InvestmentOne Report 

Please click to download the Weekly Report for the week ending Friday 1st January 2019

Global Economy

·         Asian and American stocks rallied this week on the back of what seems to be another glimpse of a breakthrough in the latest round of trade talks. Also supporting the rally was the U.S Fed’s decision to maintain the status quo in policy rates and a temporary end to the U.S government shutdown. On the other hand, the U.K continues to be on the receiving end of fatal blows rendered by the European Union as Brexit uncertainties continue to intensify. 

Nigerian Economy

·         In the outgone week, the CBN released the Purchasing Manager Index (PMI) report for the month of January 2019, which showed economic expansion, albeit at a slower pace compared to the previous month. In the same vein, the House of Representatives has proposed a minimum wage of N30,000, higher than the N27,000 that was approved by the National Council of State.  

Equities Market

·         The Nigerian equities market closed negative in the outgone week, having lost in four of the five trading sessions of the week. As a result, ASI was down 2.51% week-on-week to close at 30,636.36pts. In the same vein, market capitalization declined to N11.42trillion, from N11.72trillion in the previous week. 

Money Market

·         Despite the CBN’s N585billion worth of OMO auctions, money market rates declined in the outgone week as Overnight rate and Open-Buy Back decreased by 114bps and 101bps to close at 11.86% and 11.07% respectively. The decline in rates may not be unconnected with the maturity of  OMO bills as well as inflows from FAAC allocation which may have eased system liquidity. 

Bond Market

·         The bond market was positive in the outgone week, as yields declined across most maturities.

Foreign Exchange Market

·         At the interbank market, the Naira remained somewhat flat at N307 levels against the USD as it continues to see support from CBN’s intervention sales.

The Week Ahead  

United States

·         The Trade report for the month of November 2018 will be released on the 6^th of February 2019.

China

·         The Trade report for the month of December 2018 will be released on the 5^th of February 2019.

Russia

·         The Inflation report for the month of January 2019 will be released on the 6^th of February 2019.

United Kingdom

·         The BOE’s interest rate decision will take place on the 7^th of February 2019.

Germany

·         The Trade report for the month of December 2018 will be released on the 8^th of February 2019.