Global Market Updates:
US Inflation Slowed in February
US Inflation eased to 2.8% YoY in February from 3.0% YoY the previous month. Core Inflation (inflation reading that excludes the impact of energy and food ) also trended lower to 3.1% YoY (vs 3.3% YoY in January).
An easing inflationary reading suggests prices are not rising as fast as they did relative to comparable period.
US Equity Markets
Last week, the US equity indices closed notably lower- dipped by 3.0%, 2.4%, and 2.2% -across the S&P 500, NASDAQ and Dow Jones, respectively.
The S&P500 joined the NASDAQ index in the correction zone after shedding more than 10% relative to their record highs. However, the market remains on edge due to uncertainties around tariffs and geo-political tension.
An equity market correction is when there is a drop of 10% or more from the most recent high of an equity index.
Domestic Market Updates
Nigerian Stock Market
The NGX ASI (All Share Index) lost 0.51% last week.
Sell-offs in MTNN (-4.22%), DANGSUGAR (-5.27%), OANDO (-7.14%), CONOIL (-10.0%), and UBA (-3.56%), outweigh the buying interest in GTCO (2.52%), and TRANSACORP (8.74%).
The performance was broadly bearish across most sectors, as all indices closed in the negative territory except the Consumer Goods Index and the Insurance Index.
The Banking, Industrial and the Oil & Gas sub-sectors shed 0.45%, 0.21% and 1.15% week-on-week, respectively.
Treasury Bills & Bonds – Is It Time to Lock in Your Money?
The Treasury Bills (T-Bills) market saw mixed sentiments going into mid-week as investors awaited the NTB primary auction.
At the auction, the Debt Management Office sold ₦678.76 billion across 91-day, 182-day, and 364-day papers, even as the discount rates cut-off at 17.0% p.a., 17.79% p.a. and 18.39% p.a., respectively. Of note, these closing rates were higher for the 182-day and 364-day tenors relative to similar auction two weeks ago.
What does this mean for you?
- The growing concern for a global economic slowdown and declining crude oil price poses a risk for the Nigeria external reserve as well as the ability of the CBN to support the Naira, when this is required.
- Global uncertainty to persist due to the tariff war and rising geo-political tension.
- Consider investing in the Money Market Fund given the higher return relative to your savings account.
- Allocate money to Treasury bills and Fixed Deposits to lock in a fixed interest rate.
- Diversify into the Dollar Bond Fund to hedge against Naira depreciation, especially if you have no exposure or have future USD obligations.
Bonds
The FGN local bond saw limited activity throughout the week, with trading volumes staying low due to tight liquidity. Earlier in the week, selling interest was concentrated on the February 2031, and May 2033 papers; but this was quick to filter to the April 2029, February 2031, and May 2033 papers. As a result, average yield rose by 23bps week-on-week across the yield curve.
Eurobonds
The Eurobonds market started the week with sharp selloffs in the Nigerian Eurobonds, thereby pushing average sovereign yield to 9.33% p.a. However, positive U.S inflation numbers provided some respite as the yield declined going into the end of the week.
Currency – What’s Happening to the Naira?
USD/NGN: The naira weakened slightly to ₦1,517.93/$ (from ₦1,517.24 last week) at the NAFEX window of the Central Bank of Nigeria.
Inflation: Nigeria’s inflation rate dropped for the second month consecutively in the month of February 2025. The headline rate fell from 24.48% in January to 23.18%.
