FCSL Weekly Report FEB 14TH ,2020
Global Economy –Rundown:

The second quarter annualised Gross Domestic Product of United Kingdom contracted by 20.4%, this was due to comprised social activities that were on lockdown for three months, these activities account for a significant portion of the UK’s economic activities. The United Kingdom, economic experienced the most contraction in Q2 when compared to other developed climes. However, the monthly GDP data revealed an economic expansion for the month of June, at 8.7%, which is a positive premise for an expansionary trajectory for the coming quarters, as pent-up consumer demand is expected to propel strong economic recovery, in the event that labour market deterioration is stemmed.

 

Domestic Economy –Rundown:

The National Bureau of Statistics (NBS) released its Labour Force Statistics report for the first time since December 2018. The unemployment rate rose to 27.1% in Q2-20 (Q3-18: 23.1%) while the underemployment rate rose to 28.6% (Q3-18: 20.1%). Nigeria’s total labour force was estimated at 80.29 million people as at Q2-20 (Q3-18: 90.50 million). Nigeria’s combined unemployment and underemployment rate as at Q2-20 stood at 55.7% (Q3-18: 43.2%). Between Q3-18 when the NBS last published the unemployment report and Q2-20, the rate of unemployment has grown by 4ppts. Notably, the unemployment rate among young people (15-34 years old) was 34.9% in Q2-20 (Q3-18: 29.7%) while the rate of underemployment for the same age group rose to 28.2% (Q3-18: 25.7%).

Currency:

The Naira recorded a marginal appreciation of 0.06% against the dollars, at the I&E FX window, to close at a benchmark rate of N386.00/USD, while at the parallel market, Naira closed flat at N475/USD.

Equities

The equities bourse maintained its upward rally for the week as the week-on-week performance indicated a 0.63% appreciation, while the YTD ASI growth was a negative growth of 6.12%. The sector performance of the NSE indices was bullish for the week, as the average change of the NSE Indices was 1.31%, based on the indices monitored. The marginal rally on the ASI was spurred by rebound recorded on Oil & Gas index.

 

Fixed Income:

The overnight rate and open buyback increased to 19.80% and 17.60% for the week, the hike was spurred by a squeeze in liquidity level.

At the T-Bills Primary auction, aggregate bills sold was N56.78 Billions, at a respective clearing rate of 1.20%-91days, 1.40%-182days and 3.20%-364days. According to T-bills secondary market activities, that was bullish for the week, as average yield dipped by 24bps to 1.26%.

The bond market closed the week on a bearish trend as average increased by 13bps to 8.29%, while the highest yield appreciation was recorded within the short end of the yield curve that recorded a 144bps appreciation in yield.

 

 

 

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