FCSL WEEKLY MARKET REPORT_ 2ND OCTOBER, 2020

 
Global Economy –Rundown:
China’s official Manufacturing Purchasing Manager’s Index for the month of September ramped up marginally by 0.50 index point to 51.50 index point from the previous month index readings of 51.00, the improved index was propelled by resilient export activities and infrastructure expansion that has resulted in enhanced demand and supply, as Foods & Beverages exhibited encouraging consumers demand for the month. The private survey of the Manufacturing Purchasing Managers Index also indicated an expansionary activity for the month. A sustained uptick in manufacturing activities is expected to spur an improved employment rate, however significant growth in labour data relies heavily on long-term economic recovery and suitable external environment for the Chinese economy.
Domestic Economy –Rundown:
Fitch Ratings has revised the outlook on Nigeria’s long-term foreign-currency issuer default rating (IDR) to stable, from negative. It also affirmed the country’s IDR at ‘B’. According to a statement, the revision of the outlook reflects a decrease in the level of uncertainty surrounding the impact of the global pandemic shock on the Nigerian economy. It pointed out that oil prices have stabilised, while global funding conditions have eased and domestic restrictions on movement have started to be relaxed. However, the rating agency has identified the potential risk element confronting the Nation, being the backlog of foreign currency pending settlement, as it affirms that the Apex bank has prioritise currency stability above other monetary policy targets.
Currency:
The Naira closed recorded a marginal appreciation, as the exchange rate at the I&E FX window settled at N385.80/USD, also at the parallel market, Naira firmed up to N465/USD.
Equities
The equities market sustained its bullish sentiment for the week, as the week-on-week performance indicated a 2.53% growth, and the YTD ASI growth recorded a positive growth of 0.54%. The sector performance of the NSE indices was also bullish for the week, as the average change of the NSE Indices was 1.84%, based on the indices monitored.
Fixed Income:
The system liquidity at the end of the week dipped to N335.1BN, and the open buyback rate, and overnight rates for decreased to 1.00% and 1.58% respectively.
T-Bills secondary market activities were bearish as the average yield increased by 14bps to 1.77% for the week, most yields appreciation occurred at the long end of the yield curve. The primary auction witnessed an aggregate Bills worth N134.0Bn at the respective yield of 1.08%-91days, 1.49%-182days, and 2.80%-364days.
The Bond secondary market, activities maintained its bullish sentiment, as the average yield for the week dipped marginally by 9bps to 7.76%, as most yield declines were recorded across the short-medium maturity structure.

 
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