FCSL WEEKLY MARKET REPORT_ 25TH SEPTEMBER,2020

Global Economy –Rundown:
The possibility of securing lawmakers assent for an additional relief package prior to the election remains faint, as such the Fed Chair and Treasury Secretary have requested from the United State lawmakers to consider approving the utilization of the unused pandemic aid that is estimated at about $380 billion, this call is of great importance, based on increasing numbers of business entity and unemployed relief beneficiaries, whose survival has been impaired amidst unabated COVID-19 infectious rate. Although the economy as indicated some sign of rebound given the second quarter encouraging data, this still remains fragile, as the economy is faced with a stringent time in sustaining such momentum, In the absence of required fiscal boost that will propel growth.
Domestic Economy –Rundown:
The Central Bank of Nigeria Monetary Committee reduced the Monetary Policy Rate by 100 basis points from 12.5 percent to 11.5 percent, this was spurred given the elevated inflationary pressure, suppressed government revenue generation capacity, heightened debt profile, and the rising unemployment rate of the country. The committee beckons on the government fiscal policy to firm up its stimulus package, as monetary policy alone will not be sufficient in steering the economy towards the path of economic growth. The 10 members of the committee who were in attendance, also voted to retain the Cash Reserve Ratio and Liquidity Ratio at 27.5 percent and 30 percent respectively. The MPC adjusted the asymmetric corridor from +200/-500 basis points to +100/-700 basis points around the MPR.
Currency:
The Naira closed flat, as the exchange rate at the I&E FX window settled at N386.00/USD, while at the parallel market, Naira dipped to N467/USD.
Equities
The equities market was on a bullish rally for the week, as the week-on-week performance indicated a 2.92% surge, while the YTD ASI growth maintained a negative growth of 1.95%. The sector performance of the NSE indices was also bullish for the week, as the average change of the NSE Indices was 2.85%, based on the indices monitored.
Fixed Income:
The system liquidity at the end of the week surge to N684.1BN, and the open buyback rate, and overnight rates for the week inched up to 10.30% and 11.50% respectively.
T-Bills secondary market activities were bullish as average yield dipped by 7bps to 1.07% for the week, most yields declined occurred at 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 68bps to 7.11%, as most yield declines were recorded across the maturity structure. According to the Bond primary auction for the month the aggregate bond issued summed up to N103.81Billion at the respective marginal rate of 6.00%-10years, 8.52%-15years, 8.90-25years, and 8.94%-30years.
 

 
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