February 7, 2023/InvestmentOne Update
Please click to view the January 2023 Macro & Markets Update
Macro
- Moody’s investors service recently downgraded Nigeria’s credit rating to a 17-year low for the second time in less than four months. In details, the long-term foreign and local currency issuer ratings as well as foreign currency senior unsecured debt ratings were lowered from B3 to Caa1 – further down the junk territory…
Inflation
- Inflation in Nigeria eased for the first time in eleven months according to December’s Consumer Price Index (CPI) report released by the National Bureau of Statistics. Precisely, headline inflation declined by 13bps to 21.34% y/y, compared to 21.47% y/y printed in November…
Fiscal
- In the past month, Nigeria’s credit rating was downgraded by Moody’s Investors Service, a global credit rating agency responsible for providing investors with the necessary information needed to help gauge their risks in debt instruments. The downgrade, which took place on Friday 27th, 2023 saw Nigeria’s Medium and Long-term Foreign Currency (FC) and Local Currency (LC) issuer ratings decline further into the junk category from B3 and B2 to Caa1 and B3, respectively…
- Elsewhere, monthly disbursements by the Federal Account Allocation Committee (FAAC) distributed in January (from revenues generated in December) printed at N990.19 billion, an increase of 9.77% from N902.05 billion paid in the preceding month. The preceding is the highest print since June 2014 (N1.07 trillion)…
Monetary Policy & Fixed Income
- At the 1st Monetary Policy Committee (MPC) meeting of the year, the committee resumed the year with another large rate hike to curb inflationary pressures. Specifically, the committee voted unanimously to raise rates by 100bps to 17.50%, while keeping other policy parameters constant…
- Elsewhere, the financial system was awash with liquidity amid inflows from FGN coupon and T-bill’s maturity. As such, average transactions at the interbank market i.e., standing lending and deposit facilities closed at net positive of N2.83 billion – compared to deficit of N51.29 billion recorded in December 2022. Consequently, open buy back and overnight rates declined by 125bps and 33bps to 10.50% and 11.00% respectively…
Foreign Exchange
- Oil prices experienced some volatility in January 2023, falling as low as $76.83 per barrel and rose as high as $88.16 per barrel. Regardless, Brent ended the month at $85.46 per barrel against its previous month’s end at $82.58 per barrel…
- Elsewhere, data from FMDQ revealed that exporters accounted for about 44.34% of the total inflows into the IEFX window, amounting to $359.80 million while the CBN and FPI inflows accounted for 5.58% and 9.45% amounting to $47.30 million and $80.10 million, respectively. Hence, the Naira appreciated by 0.17% against the USD to close at N461.50/$ at the IEFX window. At the parallel market, the naira depreciated by 1.89% against the USD to close the month at N755/$…
Equities
- Having ended the year 2022 on a strongly positive note of 19.98%, the Nigerian stock market kicked off the new year on a positive trajectory despite the further increase in monetary policy rate by 100bps to 17.50% in January. The NGX All-Share Index rose by 3.88% to settle at 53,238.67pts…
