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·         The outlook for global growth in 2019 remains benign and momentum remains largely fragile and risks remain tilted to the downside as global policy uncertainty is close to record highs, reflecting increased risks of further escalation in trade tensions and rising political uncertainty. Additionally, near-term forecasts for emerging market and developing economies continue to be moulded by the interface between country-specific basics and a challenging external environment made manifest by the slowdown in advanced economies.

·         Elsewhere, the outlook for oil remains tilted to the positive region, as oil price should see support from the OPEC+ production cap extension in 2020, agreed in July 2019. However, according to the World Bank, oil price is expected to average US$66/bbl in 2019 and US$65/bbl in 2020; a slight downward revision relative to its 2018 average, reflecting the tempering global activity.

·         While this is negative for revenue generation for the Nigerian economy, especially as it continues to lag behind its oil production budget target, we see the payment of the minimum wage being a positive for consumer spending and GDP growth. We expect improvements in business sentiment, as reflected in the PMI, to lead to GDP growth in the near term; this should combine favourably with the CBN’s agenda to drive credit to the private sector. Nonetheless, the late passage of the 2019 budget may reduce the impact of the wage increase.

·         In the fixed income space, we see yields declining going forward. Nonetheless, we opine that the decline may begin to taper as we approach the end of the year.

·         On one hand, the need to keep Nigerian investment classes attractive to foreign investors ahead of a possible global slowdown may justify a somewhat tight monetary policy stance for the rest of the year. On the other hand, as eyes begin to fixate on the unimpressive level of growth in the local economy, the need to consolidate growth may lead to some stealthy expansionary policy.

·         Lastly, the equities market would continue to be influenced by the strength of the economy, and decisive policies stipulated to prompt growth. To be precise, Nigeria has been without a cabinet since the ministers serving during President Buhari’s first term stepped down in May. The lag has led to a slowdown in investments and an almost near – cessation in decision-making and policy implementation. In   other words, we believe a set of clear-cut, growth-stimulating policies and a competent set of ministers could help stimulate the local bourse’s performance.