FCSL WEEKLY MARKET REPORT _11TH SEPTEMBER, 2020

Global Economy –Rundown:
The United Kingdom, as decided to thrown caution to the wind as regards, post-transition trade agreement with the European Union, as the former is seeking ascent to a bills to be legislated that will empower it not to request for ratification from EU as regards state aid involving the trade of goods between Northern Ireland and the rest of EU, the bill also seeks that Northern Irish firms complete export declarations when shipping goods to the mainland, this bill is referred to as the internal Markel bills, whose content is in contrary to the Brexit divorce deal reached with EU in January, which could break international laws and jeopardize trade deal with the EU and the U.S. Therefore in event that a trade deal is not achieved by year-end between the United Kingdom and the European Union, this implies that trade relationship between both parties will be guided by World Trade Organization rules.
Domestic Economy –Rundown:
Nigeria’s Debt stock as of half-year firmed up to N31.01Trillion from N28.63 Trillion debt position as at first quarter of the year, representing an 8.31% growth, this increase was spurred by the required contingent activities that necessitated a budget support loan from International Monetary Fund, as well as additional provisions enumerated in the revised 2020 appropriation act, given the depressed government budgeted revenue for the current fiscal year, on the hills of declining Oil revenue, as global demand shrank. The debt stock of the country for the next half of the year is expected to increase, as government seek to raise further debt from multilateral Institutions. The inverse pull through effect of increasing debt stock, given a decline in government revenue generation, which will result in a pen-up debt repayment stress, and a subdued future economic growth.
Currency:
The Naira closed the week with a marginal appreciation, as the exchange rate at the I&E FX window settled at N386.00/USD, while at the parallel market, Naira was dipped to N455/USD.
Equities
The equities market was bearish for the week, as the week-on-week performance indicated a 0.05% contraction, while the YTD ASI growth was a negative growth of 4.66%. The sector performance of the NSE indices was also bearish for the week, as the average change of the NSE Indices was 0.90%, based on the indices monitored.
Fixed Income:
The system liquidity at the end of the week was N632.0BN, and the open buyback rate and overnight rates for the week inched up to 14.50% and 16.50% respectively.
T-Bills secondary market activities were bullish as average yield dipped by 6bps to 1.36% for the week, most yields declined occurred within the medium-long end of the yield curve.
The Bond secondary market, activities were mainly bullish, as the average yield for the week dipped by 62bps to 7.90%, as most yield decline was recorded across all the maturity structure.
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