November 7, 2022/InvestmentOne Update

November 2022 Macro & Markets Update 

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• Recently released Gross Domestic Product (GDP) report by the National Bureau of Statistics revealed that the Nigerian economy recorded growth for the eighth consecutive quarter since recovering from the pandemic-induced recession. In specifics, the economy expanded by 2.25% y/y in real terms in Q3 2022, compared to the 3.54% y/y recorded in the previous quarter – the slowest growth rate seen since the pandemic…
  

• Inflation sustained its upward trajectory for the ninth consecutive month, as revealed by the recently released data from National Bureau of Statistics (NBS). Precisely, the consumer price index increased by 31bps to 21.09% in October, higher than the 20.77% printed in September…
  

• Nigeria’s oil production was reported to have increased in October, according to data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), giving some respite to the abysmal performance of the oil sector. Elsewhere, Federal Account Allocation Committee (FAAC) disbursement in November (from revenues generated in October) printed at N736.78 billion — 3.08% lower than N760.24 billion paid in the preceding month…
  

• At the last Monetary Policy Committee (MPC) meeting of the year, the committee unanimously voted to raise policy rate further by 100bps to 16.50%, the highest policy rate in about two decades. The policy parameters such as the asymmetric corridor of +100/-700 basis points around the MPR, cash reserve ratio at 27.50% and liquidity ratio at 30% remained unchanged. In a bid to tame inflationary pressures, the apex bank cumulatively raised rates by 500bps in 2022…
  

• In the previous month, bearish sentiment permeated the oil market as worsening covid outlook in China weighed on global demand. In addition, concerns about civil unrest in China, downgrade in global oil demand outlook amid recession risks further drove oil prices south. Interestingly, the OPEC+ 2million bpd production cut was insufficient to taper the downward trajectory of oil prices…
  

• Defying expectations of a continued downward trend, the local bourse rebounded strongly in the month of November after a five-month   bearish streak. The NGX All-Share Index appreciated by 8.72% in November recording the second-best month-on-month performance this year, to settle at 47,660.04pts. Similarly, market capitalization jumped from N23.87 trillion to N25.96 trillion and year-to-date return significantly rose to 11.57%.