Key events on the Global Scene:
Global equities bullish trend holds sway…
This week, the global equities remained resilient as ex-Asian markets shrugged off the impact of trade war scares, finding support in corporate actions and positive interest rate outlook. The US job growth in January was lower than expected, with the Department of Labour reporting an increase of 143,000 jobs, compared to 307,000 in December and market forecast of 168,000.
The low growth came amidst wildfires in California, severe winter weather, and political transition – although these factors may not have significantly affected job growth. Despite the lower-than-expected number, US Nasdaq and S&P 500 indices gained 1.1% and 0.5% WoW respectively, partly supported by positive trend in unemployment rate, which eased 0.1% to 4.0% in January.
Key events on the Domestic Scene:
The Treasury Bills market experienced mixed sentiments throughout the week. Early sessions saw subdued activity, with investors cautiously trading longer-term maturities, including January NTB and OMO bills. Liquidity-driven demand intensified midweek, particularly for December and January papers, though sellers remained reluctant ahead of the NTB auction. The CBN’s NTB auction, offering ₦670 billion against ₦955.369 billion maturity, attracted ₦3.218 trillion in subscriptions, with the stop rate for the 1-year falling to 20.32% (vs 21.80% prev.) on the 364-day tenor. Post-auction, unsuccessful bidders fueled secondary market demand, supporting bullish sentiment. By week’s end, activity remained robust, with the average mid-rate for benchmark NTBs declining 40bps WoW to 21.76%.
Bullish dominates as the ASI up y 1.4% WoW
- The Nigeria bourse marketended the week, a slew of positive corporate earnings releases (e.g. PRESCO 2024 PAT growth YoY: +217.3% and CORNERST 2024 PAT growth YoY: +61.3%) fuelled five days of gains, pushing the NGX-ASI higher by 1.4% to print at 105,933.03 points. Consequently, market capitalisation gained 1.4% to ₦65.6tn, while YTD return rose to 2.9% (previously 1.5%). Activity level varied as average volume traded fell 6.0% to 610.1m units while value traded rose 42.1% to ₦19.7bn. The top traded stocks by volume were ACCESSCORP (560.0m units), FBNH (304.9m units) and ZENITH (169.3m units), while GEREGU (₦16.6bn), ACCESSCORP (₦14.9bn), and FBNH (₦9.2bn) led in terms of value.
- Sectoral week, performance was positively skewed as five indices gained while the Consumer Goods index fell by 0.6% WoW, driven by losses on NB (-5.0%) and INTBREW (-1.8%). Leading the gainers, the Banking and Insurance indices rose 4.7% and 1.6% respectively, due to price uptick in FBNH (+10.2%), ACCESSCORP (+7.7%), SOVRENIN (+21.0%) and REGALINS (+11.6%). Similarly, gains on BETAGLAS (+21.0%), WAPCO (+5.6%), MTNN (+2.0%) and CHAMS (+4.7%) spurred the Industrial Goods and AFR-ICT indices up by 0.9% and 0.8%, respectively. Trailing, the Oil & Gas index rose 0.6% as a result of price appreciation on ETERNA (+32.8%) and OANDO (+3.2%).
Capital Market Review/Outlook (FI and Equities):
- The Eurobond market opened the week with a bearish trend, as SSA and North African securities declined over 1pt due to renewed trade war fears following President Trump’s tariff announcement. However, sentiment improved after the U.S. deferred tariffs on Mexico, sparking a rebound in buying interest. Midweek, mixed sentiments emerged, with early SSA demand fading due to profit-taking. Strong investor appetite returned following eased trade tensions, though weaker U.S. job openings data tempered optimism. By week’s end, profit-taking persisted after U.S. payroll data. The average mid-yield for Nigerian Eurobonds rose 1bp WoW, closing at 9.27%.
- The FGN local bond market started the week on a cautious note, with trading focused on the February 2031 and January 2035 maturities. As the week progressed, buying interest strengthened, particularly in the newly issued April 2029, alongside February 2031, May 2033, and January 2035 securities. Midweek, demand softened ahead of the NTB auction, but trading rebounded as participants shifted attention to the secondary market. By week’s end, bullish sentiment prevailed across the curve, leading to a 54bps WoW decline in the average mid-yield, which closed at 19.78%.
Macro Economic Variables
| Equities | This week | Prior week |
| S&P 500 | 2.45% | 2.70% |
| NGX ASI | 2.92% | 1.35% |
| Fixed Income | ||
| Overnight | 32.75% | 29.57% |
| Open Buy Back | 32.42% | 29.14% |
| 1 year T-bill | 19.35% | 20.84% |
| 5-year bond | 20.90% | 21.57% |
| 10-year bond | 21.68% | 21.35% |
| Currency | ||
| FX Reserves ($’bn) | 39.45 | 39.77 |
| USD/NGN | 1,500.78 | 1,478.22 |
| Crude Oil (N/$) | ||
| Brent | 74.71 | 76.81 |
Key Economic Variables
| CPI (%) YoY | DEC-24 | NOV-24 |
| Headline Inflation | 34.80% | 34.60% |
| GDP (%) YoY | Q3 24 | Q2 24 |
| Real GDP | 3.46% | 3.19% |
| Monetary Policy Rate (%) | 27.50% |
Securities Recommendations:
| Security | Rationale |
| AXA Mansard Money Market Fund | The fund is currently at c.20.43% as at 10th February, 2024. |
| Dollar Denominated Fixed Deposit | Protects the investor from devaluation of the Naira and exchange rate risk with a return of c.4% – 6%p.a |
| Fixed Income Opportunities | Take advantage of our Naira fixed deposits with fixed rates from 20.65% to 23.80%p.a |
