Market News

What To Expect From The Markets This Week - 010321 - PROSHARE

FEBRUARY 27, 2021

Nigeria: Economic Dashboard  260221 

Proshare Nigeria Pvt. Ltd.

Editor's Note

Source: Proshare Research - February 27, 2021

Nigeria Economy

  • The Niger Delta Power Holding Company announced that it had signed a Power Purchase Agreement to supply electricity to Togo. It announced that a total of 70 megawatts of electricity would be sent to Togo from the Calabar Power Plant in Odukpani, Cross River State.
  • According to the Bureau of Public Enterprises, the process for the concession of the Lagos International Trade Fair Complex and the Tafawa Balewa Square is expected to commence in the second quarter of the year. Furthermore, BPE noted that the Federal Government terminated the previous concessions after the former concessionaire acted contrary to the expectations guiding the development of the legacy facilities. Other assets outlined to be concessioned include the Lagos International Trade Fair Complex, Calabar Special Economic Zone, and Kano Special Economic Zone.
  • The Federal Government and Siemens signed a contract for the pre-engineering phase of the Presidential Power Initiative which seeks to boost power generation in the country. The award letter was signed by Siemens Energy Nigeria and FGN Power Company, a special purpose vehicle created by the Federal Government for the project. The pre-engineering aspect will include engineering design works, specifications for onshore installation, commissioning works for the transmission and distribution systems network development studies, power simulation, training, and support services.
  • According to the NBS, the average price paid by consumers for premium motor spirit (petrol) increased by +12.88% year-on-year and decreased month-on-month by -0.97% to N164.09 in January 2021 from N165.70 in December 2020. States with the highest average price of premium motor spirit (petrol) were Abia (N173.75), Adamawa (N166.25), and Gombe (N165.83). States with the lowest average price of premium motor spirit (petrol) were Lagos (N160.75), Borno (N162.00), and Ekiti (N162.21).
  •  According to the NBS, the average price paid by consumers for Automotive Gas Oil (diesel) increased by +0.22>#/span### month-on-month and decreased by -2.14% year-on-year to N224.86 in January 2021 from to N224.37 in December 2020. States with the highest average price of diesel were Adamawa (N268.33), Zamfara (N262.78), and Kebbi (N257.50). States with the lowest average price of diesel were Osun (N194.60), Anambra (N195.83), and Enugu (N198.24).
  • The NERC, in its consultation paper on the review of the Meter Asset Provider Initiative (MAP), highlighted three proposed options for metering implementation.
    • The first option is to allow the implementation of both National Mass Metering (NMMP)  and the Meter Asset Provider (MAP) frameworks to run concurrently.
    • The second is to continue with the current MAP framework with meters procured under the NMMP supplied only through MAPs.
    • The third option is to wind down the MAP framework and allow the Discos to procure meters directly from local manufacturers/assemblers, and enter into new contracts for the installation and maintenance of such meters.

Global Economy

  • Hongkong's Financial Secretary announced that the government will spend more than 120bn Hong Kong dollars ($15.5bn) in the coming financial year on measures to lift the economy which has been in recession for two years. Furthermore, the budget deficit for the coming financial year is estimated to be 101.6bn Hong Kong dollars ($13.1bn). According to Hong kong's official estimates, its fiscal reserves are expected to be 902.7bn Hong Kong dollars ($116.4bn) by the end-March and could fall to around 801.1bn Hong Kong dollars ($103.3bn) in a years times.
  • According to Conference Board, United States consumer confidence increased in February, as households became increasingly positive about the labour market amidst declining new coronavirus cases and expectations for additional money from the government to help the economy's recovery from the coronavirus pandemic. The Conference Board noted that the consumer confidence index rose to a reading of 91.3 in February 2021 from 88.9 in January though confidence remains well below the reading of 132.6 in February 2020.
  • Official data from Japan reveals that its industrial output grew by +4.2% in January 2021. The growth was attributed to the pickup in global demand which boosted the demand for the production of electronic parts and general-purpose machinery. On the other hand, Japan's consumption spending gauged by retail sales declined by -2.4%  in January 2021.  The decline in Japanese retail sales could be attributed to emergency measures taken in response to the coronavirus pandemic.
  • The U.K. has agreed to allow the E.U. to delay ratification of their post-Brexit trade deal by a month. In a letter to the E.U. Commission, Cabinet Office Minister Michael Gove said that he expects that the EU “should be able to satisfy its internal requirements" by the end of April and the U.K. "would therefore not be asked to further extend the period of provisional application".

Commodities Market

Weekly Review and Outlook


  • On Monday it was announced that the landing cost of Premium Motor Spirit (petrol) imported into Nigeria has increased to N186.33 per litre.
  • The price of Automotive Gas Oil, also known as diesel, jumped to a high of N250 per litre, with businesses taking a beating on the back of rising energy costs.
  • Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions raised concerns about supply, just as demand recovers from the depths of the coronavirus pandemic.
  • Oil prices slipped on Tuesday on surprise inventory build of 1.026m barrels for the week ending February 19.
  • On Wednesday, prices climbed to fresh 13-month highs after U.S. government data showed a drop in crude output after a deep freeze disrupted production last week.
  • Oil prices were mixed on Thursday with U.S. crude edging up to its highest close since 2019 as Texas refineries restarted production after last week's freeze, while Brent eased on worries that four months of gains will prompt producers to boost output.
  • Prices dropped on Friday as a collapse in bond prices led to gains in the U.S. dollar and expectations grew that with oil prices back above pre-pandemic levels, more supply is likely to return to the market.
  • Brent had a weekly growth of +4.33% (see Table 1).


  • Gold depreciated by -3.33%, while Silver also dipped by -4.04%W-o-W (see Table 1).


  • Cocoa prices appreciated by +6.42% this week.
  • Corn prices declined by -0.18% W-o-W while Sugar also slumped by -1.90% (see Table 1).


Table 1Weekly Change in Commodity Prices





Weekly Chg






































Source: Bloomberg, Proshare Research

*Data for 26th Feb 2021 is as of 5:20 pm (Nigerian Time)



  • In the coming week, oil prices are expected to be mixed as markets grapples with supply disruptions in the United States, while optimism has been built for demand to improve with vaccine rollouts. Next week's meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies, together called OPEC+, will likely result in more supply returning to the market.
  • Gold prices are expected to be choppy in the coming week, with higher bond yields and strengthening U.S. dollar expected to weigh on the yellow metal.
  • Cocoa surplus and pandemic conditions to depress prices in the coming week.
  • Sugar prices expected to rise next week as a shortage of containers slows trade in India and high energy prices from the demand for cane-based ethanol in Brazil.
  • Corn prices are expected to dip on profit taking and technical selling.

Fixed Income and Money Market 


Money Market

Money market rates were relatively lower at the beginning of the week which was supported by robust system liquidity. This trend continued for most of the trading session this week.


At the close of the trading session this week, Open Buyback (OBB) closed at 5.67% while Overnight (O/N) rates closed at 6.33% indicating a Week-on-Week (W-o-W) significant decline of -71.65% for OBB and -69.12% for O/N rates.


Money Market Rate




###b#< Change









Source: FMDQ, Proshare Research

Rates are expected to continue to trend lower with the absence of any funding obligations.


Treasury Bills Market

The overall trading session of the Nigerian Treasury Bills (NTB) market was quiet with rates remaining flat for most of the time.


At the close of the week, the average benchmark yields for the T-bills declined W-o-W by -1.32% to close at 1.49% while OMO bills also fell by -8.14% to close at 6.09%.


Average Benchmark Yields



###b#< Change

T. Bills (%)




OMO Bills (%)








Source: FMDQ, Proshare Research

At the OMO auction today, the Apex bank offered and sold N330 billion worth of notes. The 173-day and 362-day tenor was oversubscribed while the 96-day tenor was undersubscribed. The 96-day was undersubscribed by -9.08%, 173 and 362 days were oversubscribed by +8.12% and +119.56% respectively. The 96-day 173-day & 362-day notes were allotted at 7.00%, 8.50%, & 10.10% respectively. The stop rates were left unchanged from the previous OMO auction.




Stop Rates (%)

Amount Offered (N'bn)

Total Subscription (N'bn)

Amount Allotted (N'bn)

96 days





173 days





362 days






FMDQ announced the registration of the Parthian Partners Limited N20bn Commercial Paper (CP) Programme to its platform.


Also, FMDQ announced the approval of the quotation of the Valency Agro Nigeria Limited N5.12bn Series 1 CP under its N20bn CP Programme.


Participation in the NTB market is expected to remain quiet.


FGN Bond Market

The FGN Bond market for the week was bullish for most of the trading session, although the average benchmark yield was bearish at the first session this week.


Overall average benchmark yields closed at 5.18% for the week which declined W-o-W by -2.05% with demand interest seen across all tenors.


Average Benchmark Yields



###b#< Change

Short Tenor (%)




Mid Tenor (%)




Long Tenor (%)




Source: FMDQ, Proshare Research

We expect activity to remain minimal albeit with cherry-picking across the board.


FGN Eurobond Market

Overall activity in the FGN Eurobond market was bullish which was supported by the US Federal Reserve Chairman maintained his dovish stance on interest rates and the continuous rise in the price of crude oil.  

However, at the end of the week, performance in the FGN Eurobond space was slightly bearish with selling pressure seen across the curve. Average benchmark yields rose by 2.03% to close at 5.99%. 

We expect the market to continue to react to the news both on the domestic level and international level especially to movement in crude oil prices.


Foreign Exchange Market

It was a bearish market for the Naira this week against the US Dollar and at the official window and parallel market, although at a marginal rate. The Naira declined W-o-W by -0.06% against the USD at the I & E FX window, for the BDC market it also declined by -0.84%.

The Naira closed the week at $/N410.25 at the I&E FX window, at the NAFEX (spot market) it closed at $/N410.25, and at the BDC market, it closed at $/N480, £/N669, and Euros/N580. 

Nigerian Capital Market

  • The Nigerian bourse closed the week negative as Investor Sentiment on the market was broadly negative on the equities market with a decline of -0.96%. The Nigerian Stock Exchange shed N202.38bn in Market capitalization W-o-W while YTD return and market capitalization currently stands at +48.27% and N20.82trn.
  • The volume of stocks traded on the exchange this week grew by 64.81% while the values of shares traded declined by -15.93>#/span###. A total turnover of 1.9bn shares worth N20.66bn in 24,687 deals was traded this week by investors on the floor of the Exchange; The most traded stocks by volume were WEMABANKZENITHBANK, and FBNH accounting for 782.17m shares worth N8.91bn in 4,624 deals, contributing 40.52% and 43.15% to the total equity turnover volume and value respectively.
  • Performance across sectors was mixed this week as the NSE Oil and Gas was the highest gainer for the week with a gain of 0.97>#/span### while NSE Insurance was the highest loser with -4.94>#/span###. NSE Banking advanced by +0.69>#/span###, NSE-IND, NSE-30, NSE Consumer goods, dipped this week by -0.52>#/span###, -1.91>#/span###, and -3.17>#/span### respectively.
  • Market breadth was negative for the week with 19 gainers led by ACADEMY and OANDO  as against 44 losers led by LASACO and AFRIPRUD.


Chart 1: Movement of NSEASI Index Points 19 Feb.2021– 26 Feb.2021

Proshare Nigeria Pvt. Ltd.

Source: NSE, Proshare Research




The NASD OTC Security Index (NSI) and Market Capitalization closed the trading week with a negative movement in Market capitalization and NSI. The NSI and Market capitalization closed the week at 713.91 points and N512.24bn with a decline of -0.49% and -0.49% respectively.




Dangote and Toni Index 


Dangote Index closed the week negative with 116.91 basis points from 117.08 basis points recorded the previous week, a decline of -0.15>#/span###. DANGSUGAR recorded a decline in share price by -2.70>#/span### while DANGCEM and NASCON closed flat WoW. DANGSUGAR recorded the highest decline W-o-W.


Table 2: Dangote Index W-o-W Change

Proshare Nigeria Pvt. Ltd.



In addition, the Toni Index closed negative with 99.49 basis points from 102.25 basis points recorded the previous week, a W-o-W decline of -2.69>#/span###. UBAUBCAPAFRIPRUD and TRANSCORP  all closed the week negative with -1.81>#/span###, -3.46>#/span###, -21.23% and -3.19% respectively while TRANSCOHOT closed flat WoW.


Table 3: Toni Index W-o-W Change

Proshare Nigeria Pvt. Ltd.



Given the bearish sentiment and breadth on the market this week and a likelihood of yields improving in the fixed income market we expect the current trend to continue in the coming week.


Also, we expect astute investors to take positions in dividend-paying stocks as companies release their full-year 2020 corporate earnings.


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