Nigeria’s external reserves climbs to $39.6bn

Plans by the US and the International Energy Agency members to release a combined 240 million barrels of crude oil over the next six months, coupled with extended COVID-lockdown in Shanghai China, pulled oil prices back in the week. Against this backdrop, the benchmark crude recorded a 2.8% decline to close the week at $101.42/bbl. Despite the oil market cooling off, external reserves rose 0.2% w/w to $39.6bn (06/04/2022)…

New Revenue Sharing Formula: A Relief for Constrained Sub-nationals?

This week, our torchlight shines on the performance of one of Nigeria’s revenue source, Value Added Tax (VAT) and the overdue revenue sharing formula revision. Recently, the National Bureau of Statistics (NBS) published the sectorial distribution of Value Added Tax report for Q4:2021. From the report, aggregate VAT collection stood at ₦2.1tn in 2021, up 35.4% and 12.8% relative to 2020 actual collection (₦1.5tn) and FIRS target for 2021 (₦1.2tn)…
 

Global Equities Market: Elevated Inflation Strengthens the Case for Rapid Rate Hikes

This week, hawkish guidance from the minutes of the U.S. Federal Reserve’s FOMC March meeting showed that the U.S. Fed (“Fed”) is geared up to combat the elevated inflation level as some members would have preferred a 50bps rate hike instead. Also, Fed officials agreed to taper the central bank’s balance sheet with monthly caps of about $60 billion for Treasury securities and $35 billion for mortgage-backed securities (totaling $95 billion a month) with a strong indication of rapid monetary policy tightening ahead… 

Domestic Equities Market: The Bears Tighten Hold… ASI down 0.5% w/w 

This week, the domestic equities market closed negative as profit-taking dragged the NGX-ASI down 0.5% to close at 46,631.46 points. Accordingly, YTD return moderated to 9.2% from 9.7% in the prior week while investors lost ₦114.0bn w/w as market capitalisation fell to ₦25.1tn… 

Money Market: Bearish Sentiment Resurfaces in the T-Bills Market

This week, OPR and OVN opened at 7.0% and 7.3% respectively, lower than previous week’s close of 10.2% and 10.7% as system liquidity stood at ₦180.7bn. However, on Thursday, rates trended lower at 5.3% and 5.8% respectively as system liquidity rose to ₦208.5bn. By the close of the week, OPR and OVN settled at 5.8% and 6.3% in that order as system liquidity close at ₦107.0bn…

Bonds Market: Bearish Outing in the Domestic Bond Market 

This week, the domestic debt market closed the week negative as the average yield rose 33bps w/w to 11.0%. While investors positioned at the short-end of the curve (-5bps w/w), they sold off the medium (+45bps w/w) and long-term (+34bps w/w) instruments…