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What To Expect From The Markets This Week - 080321 - PROSHARE

MARCH 06, 2021

Nigeria: Economic Dashboard @ 050321  

Proshare Nigeria Pvt. Ltd.

Editor's Note

Source: Proshare Research - March 06, 2021

Nigeria Economy

  • The Transmission Company of Nigeria announced a new peak power generation of 5,801.60 megawatts on March 1 at 9.30 pm which is higher than the previous peak generation by 22MW. Furthermore, it stated that this quantum of electricity was transmitted to power distributors across the country at a frequency of 50.09Hz. Also, the TCN announced that it achieved a new Maximum Daily Energy of 116,891.14MWH which is higher than the previous value of 116,121.42MWH achieved on the 25th of February.
  • Nigeria has signed a pact with OCP Africa to aid the second phase of the Nigerian Presidential Fertilizer Initiative in Morocco. The pact was signed by the Nigerian delegation led by the Minister of State for Petroleum, Timipre Sylva, and officials of Nigeria Sovereign Investment Authority (NSIA). The pact is expected to ensure the utilization of Nigerian gas and Moroccan phosphate to produce 750,000 tons of ammonia and one million tons of phosphate fertilizers annually by 2025.
  • The House of Representative Committee on Public Accounts has asked the Office of the Accountant-General of the Federation to forward the financial statement on the utilization of the N2.2trn revenue accruing from foreign and domestic debts raised by the Debt Management Office. The Chairman of the committee, Oluwole Oke, made the request based on a query issued against the DMO for the 2018 financial year. Furthermore, Oke said the committee also wanted to know the reason it reflected in the DMO's financial statement and he asked why the office could not account for the money that was appropriated for, which also did not appear in the books of the Office of the Accountant General of the Federation (OAGF).
  • The value of transactions via digital payment platforms i.e., Nigeria Interbank Settlement System Instant Payment System and Point of Sales terminals declined to N18.99trn in January 2021. According to the Nigeria Interbank Settlement System, the total value of NIP transactions grossed N18.5trn in January while P0S deals were worth N489.23bn. The two platforms declined by -9.22% in value of payments when compared to an aggregate of N20.92trn in December 2020, with NIP transaction value at N20.34trn and POS transaction value at N574.36bn.

Global Economy

  • China's services sector activity grew at its slowest pace in 10 months in February as firms struggled with sluggish demand and high costs. The Caixin/Markit services Purchasing Managers' Index (PMI) fell to 51.5 the lowest since April. From 52.0 in January but remained above the 50-mark that separates growth from contraction monthly. The loss of momentum could be attributed to the decline in overseas demand hit by the COVID-19 as well as the resurgence of a new number of coronavirus pandemic cases in China.
  • Australia's economy grew at a much faster-than-expected pace in the final quarter of 2020 and indicators suggest enormous monetary and fiscal stimulus are continuing to support growth this year. According to data from the Australian Bureau of Statistics (ABS) the economy grew by +3.1% in Q4 2020. Despite the best ever back-to-back quarters of growth, annual output declined by -1.1%, underscoring the havoc wrought by the coronavirus pandemic and suggesting policy support will still be needed for the 2 trillion Australian dollars ($1.57trn) economy.
  • According to the Kenya Bureau of Statistics, its year-on-year inflation in February increased to 5.78% compared to 5.69% last month. During the period under review, the food and non-alcoholic beverages index increased by +1.01% while the year-on-year food inflation stood at 6.93% in February. The food inflation was mainly attributed to increases in prices of some food items which outweighed the decrease in the price of other foodstuffs. Prices of beef with bones, wheat flour white, and tomatoes increased by +0.78%, +2.07%, and +2.1% respectively. However, there was a decline in other food items such as lemons, mangoes, and maize grain decreased by -5.64%, -0.33%, and -0.18% respectively. During the same period, the housing, water, electricity, gas, and other fuels' index increased by +0.43% between January and February 2021. The change was mainly due to an increase in the price of kerosene by +6.02% between January and February 2021. The transport index declined by -2.33% mainly due to a rise in the pump prices of diesel and petrol by +5.66% and +7.57% respectively.
  • The International Air Transport Association in its report titled 'From bad to worse: January passenger demand falls further' reported that African airlines' traffic declined by -66.1% in January 2021. Furthermore, it noted that the January capacity contracted -54.2% when compared to January 2019 while the load factor fell 18.4 percentage points to 52.3%. Also, total demand in January 2021 (measured in revenue passenger kilometres or RPKs) declined by -72% compared to January 2019. The decline could be attributed to the impact of the new variant of the coronavirus which has led governments to impose travel restrictions.

Commodities Market

Weekly Review and Outlook


  • Oil prices fell more than 1% on Monday as fears that Chinese oil crude consumption is slowing, and that OPEC may increase global supply following a meeting this week.
  • On Tuesday, Oil prices dipped to their lowest in two weeks on expectations OPEC+ producers will ease supply curbs at their meeting this week as economies start to recover from the coronavirus crisis.
  • By Wednesday, the oil price had rebounded by 2% boosted by a huge drop in U.S. fuel inventories and expectations that OPEC+ producers might decide against increasing output later in the week.
  • Oil prices extended gains on Thursday as the possibility that OPEC+ producers might decide against increasing output at the proposed meeting in the day lent support, alongside a drop in the crude inventories.
  • Prices climbed more than 1% on Friday, extending gains from the previous session, after OPEC and its allies agreed not to increase supply in supply in April as they await a more substantial recovery in demand amid the coronavirus pandemic.
  • Brent had a weekly growth of 3.97% (see Table 1).


  • Gold declined to a near nine-month low on Friday and was set for a third straight weekly decline, as the dollar and bond yields rose after Federal Reserve Chair Jerome Powell's remarks that the rise in yields was not "disorderly."
  •  Gold depreciated by -1.76%, while Silver also dipped by -4.63%W-o-W (see Table 1 below).


  • Earlier in the week, The UK signed a trade partnership agreement with Ghana that secures tariff-free trade and provides a platform for greater economic and cultural cooperation. It means Ghanaian products including bananas, tinned tuna and cocoa will benefit from tariff-free access to the United Kingdom.
  • Cocoa prices declined by -0.96% this week.
  • Corn prices slumped by -0.78% W-o-W while Sugar also declined by -0.73% (see Table 1 below).


Table 1Weekly Change in Commodity Prices





Weekly Chg






































Source: Bloomberg, Proshare Research

*Data for 5th Mar 2021 is as of 5:00 pm (Nigerian Time)



  • In the coming week, oil prices are expected to be bullish after OPEC and non-OPEC allies agreed to keep a lid on supply in April as they await an ample recovery in demand
  • Gold prices are expected to be bearish in the coming week,  as bond yields continue their upward trend and the 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 are expected to rise next week because of a late start to shipments and logistical challenges in India. 
  • Corn prices are expected to rise in the coming week on commercial and technical buying, weather conditions in South America also likely to impact prices.

Fixed Income and Money Market 

  Money Market

Money market rates for the week traded higher for most of the trading session this week. 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 15.33% while Overnight (O/N) rates closed at 16.33% indicating a Week-on-Week (W-o-W) significant rise of +170.37% for OBB and +157.98% for O/N rates (see Table 2 below).


Table 2Money Market Rate

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.

 The CBN rolled over the maturing Special bills at 2.00% on Monday but reviewed the issue rate down to 0.5% on Tuesday citing technical difficulties. Interest on the special bill was minimal as we see a rise in the yield of the instrument.

At the close of the week, the average benchmark yields for the T-bills increased W-o-W by +2.68% to close at 1.53% while OMO bills also fell by -1.31% to close at 6.01% (see Table 3 below).


Table 3Weekly Change in Average Benchmark Yields

Average Benchmark Yields



###b#< Change

T. Bills (%)




OMO Bills (%)








Source: FMDQ, Proshare Research


In the week, FMDQ approved the Registration of the Fidson Healthcare PLC N10.00 billion Commercial Paper (“CP”) Programme on its platform.


Participation in the NTB market is expected to pick up as rates have improved from the previous PMA auction.


FGN Bond Market

The overall trading session of the FGN Bond market for the week was quiet, although the average benchmark yield fell marginally at the beginning of the week.

Overall average benchmark yields closed at 5.29% for the week which increased W-o-W by +2.12% with mild sell interest seen across the mid and long-dated instrument (see Table 4 below).


Table 4Weekly Change in FGN Bonds Average Benchmark Yields

Average Benchmark Yields



###b#< Change

Short Tenor (%)




Mid Tenor (%)




Long Tenor (%)




Source: FMDQ, Proshare Research


We expect activity to pick up across the board as investors await March bonds and MPC meetings.


FGN Eurobond Market

Overall activity in the FGN Eurobond market was mixed as investor sentiment was influenced by the rise in 10 US treasuries and steady rise in crude oil price

However, at the end of the week, performance in the FGN Eurobond space was unchanged from the previous week's yields. Average benchmark yields remained flat 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

The CBN governor while addressing bankers at a summit on the economy in the previous said the official exchange rate now stands at 410 to the dollar at the I & E FX window. That is 7.6% weaker than the rate of 379 published on the central bank's website.

The Naira declined W-o-W by -0.18% against the USD at the I & E FX window, for the BDC market it remained unchanged against the dollar and Euro while it declined against the British pound.

The Naira closed the week at $/N41100 at the I&E FX window, at the NAFEX (spot market) it closed at $/N409.64, and at the BDC market, it closed at $/N480, £/N672, 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 -1.18%. The Nigerian Stock Exchange shed N245.01bn in Market capitalization W-o-W while YTD return and market capitalization currently stand at -2.27% and N20.58trn.
  • The volume of stocks traded on the exchange this week grew by +8.38% while the values of shares traded increased by +44%.  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.
  • Performance across sectors was mixed this week as the NSE Industrial Index was the highest gainer for the week with a gain of +1.44%while NSE Consumer goods were the highest loser with -6.30%. NSE Banking declined by -1.94%, NSE-30, and NSE Insurance dipped this week by -1.46%, and -4.99% respectively (see chart 1 below). 


Chart 1: Movement of NSEASI Index Points 26 Feb.2021– 05 Mar.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 697.3 points and N500.32bn with a decline of -2.33% and -2.33% respectively. 



Dangote and Toni Index 


Dangote Index closed the week negative with 116.29 basis points from 116.91 basis points recorded the previous week, a decline of -0.53%. DANGSUGAR recorded a decline in share price by -8.33%, NASCON declined by -19.28% while DANGCEM closed flat WoW. NASCON recorded the highest decline W-o-W (see Table 5 below).


Table 5: Dangote Index W-o-W Change




WoW Chg













Source: NSE, Proshare Research


Also, the Toni Index closed negative with 96.17 basis points from 99.49 basis points recorded the previous week, a W-o-W decline of -3.34%. UBAUBCAPAFRIPRUDand TRANSCORP  all closed the week negative with -2.45%, -6.69%, -3.48%, and -10.99% respectively while TRANSCOHOT closed flat WoW (see Table 6 below).


Table 6: Toni Index W-o-W Change




WoW Chg





















Source: NSE, Proshare Research





As stated last week, 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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