FCSL WEEKLY MARKET REPORT_ 7TH AUGUST, 2020

Global Economy –Rundown:
China’s dollar-denominated export increased by 0.5% on a year on year basis, while its import rose by 2.7% for the same period, the country’s trade surplus for the month of July was $62.33billion. The resilient of its export was influenced by demand for medical supplies and work from home equipment. However, the hostility the country faced from other economic powers, have propelled Beijing hierarchy to consider modifying its economic development model, which will suit a domestic production and consumption-led economic development other than its export and investment-led model.
Domestic Economy –Rundown:
A major cushioning relief came the way of the country as it was as able to secure a $1.5 Billion prepayment trade deal for its treasured commodities with one of the world biggest independent oil trader, for a compensating forward 15,000 barrels per day crude commodity for a 5years duration. The benefit of such negotiated trade will be providing the nation with additional foreign exchange liquidity, whose foreign reserves as contracted by as much as $673.13 million from $36.57bn on June 1 to $35.89bn on July 28, 2020, the nation contracting foreign reserve is linked to suppressed oil revenue and diaspora remittance
Currency:
The Naira recorded a marginal appreciation of 0.84% against the dollars, at the I&E FX window, to close at a benchmark rate of N386.25/USD, while at the parallel market, Naira closed flat at N475/USD.
Equities
The equities bourse bullish rally persisted throughout the week as the week-on-week performance indicated a 1.41%, while the YTD ASI growth was a negative growth of 6.71%. The sector performance of the NSE indices, we monitor were bullish for the week, as the average change of the NSE Indices was 2.06%.
Fixed Income:
The overnight rate and open buyback increased to 7.17% and 6.30% for the week, the hike was spurred by a squeeze in liquidity level.
The T-bills market closed the week on a bullish note, as the average yield for the week declined by 6bps to 1.50% compared to previous week average yield of 1.56%
The bond market closed the week on a bearish trend as average increased by 71bps to 8.17%, while the highest yield growth was recorded within the medium-term bond, that recorded a 158bps appreciation in yield.
 

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