October 8, 2022/InvestmentOne Update 

Please click to view the September 2022 Macro & Markets Update

• The World Bank in its latest edition of Africa’s pulse disclosed that Nigeria’s economic outlook is in the balance and its propensity to attract domestic and foreign investment is on the downside. In specifics, real GDP is expected to slow from 3.60% in 2021 to 3.30% in 2022, 50bps below the previous forecast by the bank earlier in April.
  

• Monetary policy normalization dominated key talking points in the month of September as major central banks boost efforts to curtail multi-decade high inflation. In details, the Federal Reserve (+75bps to 3.35%), Bank of England (+50bps to 2.25%) and European Central Bank (+75bps to 1.25%) all raised interest rates amid spiralling inflation figures mainly driven by sky-rocketing food and energy prices…
  

• According to data from the National Bureau of Statistics, inflation remains entrenched in the economy as it surged to a new high of 20.52% y/y in August 2022 – the largest print since the NBS data series in 2009…
  

• In the past month, Nigeria’s debt profile was reported to have deteriorated further. According to the Debt Management Office (DMO,) total debt stock rose by 2.98% q/q from N41.60 trillion in Q1 2022 to N42.84 trillion to Q2 2022. Elsewhere, Federal Accounts Allocation Committee (FAAC) disbursements reversed its upward trajectory after three consecutive months of uptick as the amount paid out in September (from revenues generated in August 2022) declined by 29.45% m/m to N673.10 billion…
  

• At the penultimate meeting of the year, the monetary policy committee of the Central Bank of Nigeria (CBN) unanimously voted to further push up the monetary policy rate (MPR) by 150bps to 15.50%. Elsewhere, the fixed income market traded on a negative note as yields notched higher at both the primary and secondary market. At the NTB primary market auction, stop rates inched up for all tenors with average net issuance of c. N37.98 billion and bid to cover ratio of 1.68x (1.12x in August)…
• In the previous month, macro-economic data rattled the oil market as focus shifted to the soaring inflation and the attendant implication on the global economy which includes thin liquidity as the FED tightened further, soaring dollar and possibility of a recession. While events such as the escalation in the Russia-Ukraine war, news of China’s re-opening and OPEC’s marginal cut provided a bit of upside support to the market, this was not enough to counteract the bearish bias in the air…
• The bears continued to dominate trading activities on the local bourse in the month of September as the market trotted south for the fourth consecutive month, which also accounted for the fifth monthly loss for the year. The All-Share Index dipped by 1.63% m/m to settle at 49,024.18pts. Consequently, market capitalization declined to N26.42 trillion from N26.88 trillion, while the year-to-date return moderated to 14.77%…