July 5, 2019/InvestmentOne Report

Please click to download the Weekly Report for the week ending Friday 5th July 2019

Global Economy

·         The U.S. dominated the global news in the outgone week, with the news of the rebound in payrolls in June and the widening U.S. trade deficit hit the market. Furthermore, oil is set its biggest weekly decline since June on the back of concerns of slowing global growth and a stronger dollar.

  Nigerian Economy

·         From the absence of a new executive cabinet to the decline in monthly oil revenue and delayed implementation of the approved minimum wage, the local scene was not short of bad news.

  Equities Market

·         The local bourse lost in outgone week following the losses recorded in all five trading sessions. Resultantly, the market closed negative 2.32%, week-on-week to close at 29,270.95pts. Similarly, market capitalization declined to N12.90 trillion from N13.15trillion in the previous week. We believe that the general investors’ sentiment, which remains negative, combined with the new CBN directive to DMB’s may have caused the decline in the equities market this week.

   Money Market

·         Money market rates declined in the outgone week as Overnight rate and Open-Buy Back fell to 4.57% and 3.86% from 4.64% and 4.00% respectively. The decline in rates may have been due to the significant inflows from OMO maturity, FAAC allocation and bond maturity despite CBN’s OMO auctions this week.

  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 shed 0.02% to close at N306.95 against the USD as it continues to see support from CBN’s intervention sales.

The Week Ahead

United States

• The Inflation rate for the month of June 2019 will be released on the 11^th of July 2019.

Germany

• The Balance of trade for the month of May 2019 will be released on the 8^th of July 2019.
• The Inflation report for the month of June 2019 will be released on the 11^th of July 2019.

China

• The Inflation rate for the month of June 2019 will be released on the 10^th of July 2019.
• The Balance of trade for the month of June 2019 will be released on the 12^th of July 2019.

France

• The Inflation rate for the month of June 2019 will be released on the 11^th of July 2019.

United Kingdom

• The Balance of trade for the month of May 2019 will be released on the 10^th of July 2019.

Russia

• The Balance of trade for the month of May 2019 will be released on the 12^th of July 2019.

Canada

• The BOC’s interest rate decision will take place on the 10^th of July 2019.