Domestic Macroeconomy: Disappointing Lagging Data Overshadow October's Positive Sparks
October was undeniably eventful, marked by geopolitical events such as the conflict in the Middle East involving Israel and Hamas. On the domestic scene, the lifting of the FX ban on 43 items and the positive oil production numbers for September (up 14.0% m/m to 1.35mbpd; the highest in 20 months) were welcome developments. To usher in the month, this review edition focuses on the defining events especially key economic data releases - Q2:2023 Capital importation data, September CPI data, and Sub-nationals IGR data for FY:2022 - and provides guidance and expectations for the concluding part of 2023...
Global Equities Market: Geopolitical Tension and Underwhelming Corporate Earnings Spook Market
Indeed, October was a gory halloween for the global equities market as investors were mostly risk-off due to the higher yield environment, expectation of Fed rate hike, and the emergence of fresh geopolitical tension (Israel-Hamas war). As such, the MSCI World Index dipped 3.0% m/m. In the US, Fed Chair, Jerome Powell signaled that the policy rates could be held steady at its November 1st policy meeting, with warnings of hawkish decisions if inflation remains hot...
Domestic Equities Market: Historic 70,000 points on the Cards… ASI up 4.3% m/m
In October, the local bourse continued its monthly uptrend that began in May, driven by impressive Q3 corporate releases and prevailing sense of optimism in the market. Following, the NGX-ASI advanced 4.3% to settle at 69,236.19 points, YTD improved to 35.1% from 29.5% while market capitalization gained ₦1.7tn to ₦38.0tn...
Foreign Exchange Market: Knee-Jack Reaction to Policy Reversal Drags FX Rates to Historic Low
After four months of a sustained uptick, the global crude oil prices cooled off mildly in October, evidenced by the 3.1% m/m decline in Brent crude oil price to $90.78/bbl. The price moderation was driven by the combined impact of slowing demand from China amid weak economic fortune (Sino’s Manufacturing PMI slowed to 49.5 from 50.2 index points in August), higher crude production in the US (daily average up to 13.05mbpd from 12.95mbpd in the prior month), and positive progress on diplomatic moves to contain the Israel-Hamas war from escalating...
Money Market: Bears Hold Sway
System liquidity closed ₦557.7bn short in October, following the lifting of restriction on the CBN’s Standing Deposit Facility (SDF) and net sales of ₦622.7bn worth of OMO and NT-bills. The market dynamics pushed the OPR and OVN rates higher 12.9 and 13.1ppts apiece to 15.6% and 16.5%...
Bonds Market: Weak Outing in the Local Bonds and Corporate Eurobond Space while SSA Markets Return Positive
During the month, the Debt Management Office (DMO) conducted its bond auction, reopening the FGN APR 2029, JUN 2033, JUN 2038, and JUN 2053 bond instruments. A total of ₦360.0bn was offered while subscription stood at ₦334.8bn. Demand was depressed across all instruments save the JUN 2053 instrument, which recorded a bid-to-cover ratio of 1.06x (September: 1.19x). Marginal rates for the APR 2029, JUN 2033, JUN 2038, and JUN 2053 bonds increased 40bps, 30bps, 25bps and 45bps to 14.9%, 15.75%, 15.8% and 16.6% respectively...
