FCSL WEEKLY MARKET REPORT_ 9TH OCTOBER, 2020

Global Economy –Rundown:
China has reported some blossom economic data on its path to recovery from the Covid-19 economic shock, this is manifested by its encouraging PMI index that has indicated expansionary growth in recent month, however, the sustainability of such growth is threatened, as this was propelled by export-driven activities and this embedded with underlying risk potential, as the rest of the globe is still inundated with the Covid-19 economic shock, which may trigger an aggravated international trade tension that may adversely affect the sustainability of trade surplus of the country that focuses on public investment growth model that is facilitated by debt fueled investment, as potential exacerbated financial risk remains. However, the new phase of sustainable development that should be explored by china, so as to stimulate innovation and growth productivity will be a harmonized improved social welfare and investment in human capital, as both are expected to rebalance the deficient demand encountered by Chinese domestic economy, as external consumption remained threatened by aggravated global trade tension.
Domestic Economy –Rundown:
According to the National Bureau of Statistics, the aggregate credit facilities disbursed across the federation in the second quarter grew by 1.82% to N18.90 trillion from N18.56 trillion initially disbursed in the preceding period, while the aggregate credit payout across the federation grew by 22.38%. The state with the highest recipient of credit, disbursement was Lagos state that accounted for 78.94% of the aggregate disbursement, while Yobe State being the least recipient accounted for 0.07% of the aggregate sum. The sectorial loan payout indicated that the annual Agricultural Credit Guarantee Scheme Fund disbursed the sum of N4.07m for the 2019 fiscal year, while the prior year disbursement for the fund was N4.37m. Also, the Banking data indicated a decline of 2.06% in remittance inflow for the 2019 fiscal year that stood at $ 23.81 billion, as against $24.31 billion inflow remitted in the prior year.
Currency:
The Naira was relatively stable for the week, while at the tail end of the week a marginal decline was recorded, as the exchange rate at the I&E FX window settled at N385.83/USD, while the parallel market, Naira appreciated in value to N457/USD.
Equities
The equities market recent bullish sentiment evaporated from mid-week till the last day of the week, however, the week-on-week performance indicated a 5.30% growth, and the YTD ASI growth recorded grew by 5.86%. The sector performance of the NSE indices was also bullish for the week, as the average change of the NSE Indices was 3.31%, based on the indices monitored.
Fixed Income:
The system liquidity at the end of the week dipped to N1.1BN, and the open buyback rate and overnight rates rose to 4.00% and 4.09% respectively.
T-Bill’s secondary market activities was bullish as the average yield decreased by 42bps to 1.34% for the week, as market yields dipped across all maturity spectrum.
The Bond secondary market, activities maintained its bullish sentiment, as the average yield for the week dipped by 70bps to 7.05%, as yield declines were recorded across market maturity bandwidth.
 

 
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