weekly review and outlook. – First Ideas Limited

weekly review and outlook.

 Weekly Review and Outlook

Summary and Outlook

Growth data for Q2 is expected later in the month, and while FTY2021 forecasts range between 2.5% (IMF), 3%(FG), and 3.15%(CBN), the major determinants of where the needle rests at the end of the day would be issues pertaining largely to the global economy such as the covid 19 pandemic and crude oil prices. The spread of the delta-variant of covid 19 currently casts doubt on global recovery, following the increased number of cases in the US, China, and Japan- three of the largest economies in the world. While this may have forced a reversal in the upward trend in oil prices, the recent tensions in the Middle-east appear to create a counteracting effect. On the local scene, slightly improved but weak naira, the parallel premium in the FX market, insecurity, and the large infrastructural deficits would make attracting FDI herculean. On a brighter note, the increased SDR allocation of US$650bn by the IMF to member countries should see Nigeria access a soft loan of up to $3.4bn which to provide investible funds, shore up the reserves and help with increasing liquidity in the FX market. 

Commodities Market

Weekly Review and Outlook



  • The GMD of NNPC, on Monday, said the corporation is set to roll out policies to guide its IOC Partners who wish to divest from the joint ventures or the Nigerian oil and gas industry. The NNPC boss noted that the corporation cannot stop partners from divesting their interests, even though it will create a challenge for the country in terms of getting the right and competent investors to take the positions and add value to the assets.
  • A report released by NNPC during the week shows that the total revenue generated from the sale of white products for the period of March 2020 to March 2021 stood at N2.13tn, where petrol contributed about 99.24% of the total sales with a value of N2.11tn. In March 2021, the Petroleum Products Marketing Company said it recorded N234.63bn revenue from the sale of white products.
  • On Tuesday, Senegalese Energy Minister, Aissitou Sophie Gladima paid a courtesy visit to Nigeria’s Minister of State for Petroleum Resources, Timipre Sylva. The Senegalese minister said Nigeria’s over 50 years of oil production is an excellent example for Senegal as it is beginning to grow its oil industry. She noted that her country is reaching out to Nigeria to support its oil and gas industry in the areas of security management, national oil company (NOC) organisation and strategies, and local content regulations.
  • The Department of Petroleum Resources (DPR) on Tuesday said it is formulating a Maximum Economic Recovery (MER) strategy for Nigeria to attain maximum value from its oil and gas resources.
  • The Federal Executive Council on Wednesday approved $1.48bn for the rehabilitation of two refineries in Warri and Kaduna. The contract was awarded to Messers Saipem SPA and Saipem Contracting Limited and would run in three phases of 21, 23, and 33 months.
  • The price of Nigerian Bonny Light, its premium crude oil grade, on Wednesday dipped to $71.24 per barrel from $72 recorded the previous day, over fears of increasing United States stock and the spread of Delta variant.
  • The Department of Petroleum Resources (DPR) on Thursday said it is working towards capturing all the 33,000 filling stations in Nigeria into its Downstream Remote Monitoring System (DRMS) by December to check fuel smuggling and other illegal activities in the downstream oil sector.


  • The Executive Secretary, African Refiners, and Distributors Association, Anibor Kragha on Tuesday said African nations need to focus on reducing sulfur levels in petroleum products because Africa’s consumption of fossil fuels would rise quickly in the coming decades even as the supply of clean energy continue to grow.
  • Oil prices fell on Monday by over 3% as weak economic data from China and the United States surfaced. China’s July factory activity grew at the slowest pace since February 2020 and U.S. manufacturing sector also recorded lower growth while higher crude output from OPEC producers stoked fears of weakness in oil demand and oversupply.
  • Iran’s foreign minister on Monday said the country will respond promptly to any threat against its security as the United States, Israel, and Britain blamed her for an attack on an Israeli-managed tanker off the coast of Oman.
  • The Middle East state-held oil firms, including Saudi Aramco and the Abu Dhabi National Oil Company (ADNOC), are considering selling more assets to investors to monetize their stakes and attract foreign investors as oil prices rise.
  • The state-owned Indian Oil Corporation (IOC), the largest oil refiner in the country, says it is looking to boost its crude oil refining capacity by one-third over the next half-decade as it believes that gasoline and diesel demand will continue to rise in India
  • Oil prices extended the previous session gains on Friday but headed for the biggest weekly decline since March as travel restrictions to curb the spread of the COVID-19 Delta variant are raising concerns about fuel demand.
  • Brent had a weekly decline of -7.35% (see Table 1).


Gold depreciated by -2.93% while Silver dipped by -4.64% W-o-W (see Table 1).


  •  Cocoa prices grew by 5.04% this week.
  • Corn prices rose by 2.39% W-o-W while Sugar appreciated by 4.02% (see Table 1).

Table 1Weekly Change in Commodity Prices

Commodity06-Aug-2130-Jul-2131-Dec-20Weekly ChgYTD Chg

Source: CNBC                                    *Data for 6th August 2021 is as of 6:12pm (Nigerian Time)


  • In the coming week, oil prices are expected to dip on worries that travel restrictions to curb the spread of the Delta variant of COVID-19 will derail economic gains.
  • Gold prices are expected to decline in the coming week, following a strong U.S. jobs report which boosted expectations the Federal Reserve could begin tapering its economic support sooner than previously anticipated.
  • Cocoa prices to be bearish next week as the market struggles to absorb excess supplies following bumper harvests in top growers Ivory Coast and Ghana.
  • Sugar prices are expected to be steady next week as frost in Brazil limits output.
  • Corn prices are expected to be bullish next week amid a severe drought in the United States.

Fixed Income and Money Market 

Currency Market

  • There was a sense of calm in the currency market especially at the BDC market, the Naira strengthened at the BDC market as the banks seem to have complied with the new CBN stance to sell FX to retailers.
  • At the I & E FX window, the domestic currency dipped slightly by +0.01% on a week-on-week (W-o-W) basis to close at N411.50/US$ at the close of trading on Friday.
  • Against the US dollar at the BDC it closed at US$/N508 appreciated by +3.24%, against the British pound it also appreciated by +1.4% to close at £/N705, and against the Euro by +1.7%.
  • Naira closed the week at $/N411.50 at the I&E FX window, at the NAFEX (spot market) it closed at $/N411.10.
 30-July-2106-Aug-2021% Change
I & E FX Window ($/N)411.44411.50+0.01%
NAFEX ($/N)411.19411.10-0.02%
BDC ($/N)525508+3.24%

Source: FMDQ, AbokiFX

Money Market

  • For a major part of trading this week, system liquidity was elevated pushing money market rates low and trading in single digits.
  • However, at the close of the session on Friday, funding rates rose significantly. Open Buyback (OBB) closed at 20.00% while Overnight (O/N) rates closed at 20.50% indicating a W-o-W rise of +166.67% for OBB and +164.52% for O/N rates.
Money Market Rate
 30-July-2106-Aug-2021% Change
OBB (%)7.5020.00+166.67%
O/N (%)7.7520.50+164.52%

Source: FMDQ

  • Funding rates are expected to trade in double digits trend in the coming week in the absence of any maturity.

Treasury Bills Market

  • The treasury bill market was broadly bullish for most of the trading session this week, as we saw some buying across all tenors this week.
  • At the close of the market this week, average benchmark yields for T-bills fell by -4.65% to 5.63%, OMO bills declined up by -10.53% W-o-W to close at 7.78%, CBN’s Special Bill fell marginally by -0.12% to close at 8.22%.
Average Benchmark Yields
30-July-2106-Aug-2021% Change
T. Bills (%)5.905.63-4.65%
OMO Bills (%)8.697.78-10.53%

Source: FMDQ

We expect activity next week to be dictated by the market liquidity situation. 

FGN Bond Market

  •  The bulls dominated the FGN bond market as positive sentiment was seen across the board.
  • The overall average benchmark yields closed at 9.06% for the week which fell W-o-W by -2.10%.
Average Benchmark Yields
30-July-2106-Aug-2021% Change
Short Tenor (%)6.636.31-4.87%
Mid Tenor (%)10.4010.34-0.62%
Long Tenor (%)12.6912.55-1.09%

Source: FMDQ

FGN Eurobond Market

  • The Covid-19 induced risk-off sentiment caused yields in the Eurobond market to inch up this week and selling was seen across the board with minimal volumes traded.
  • On the domestic space, the Federal Government of Nigeria appointed transaction advisers for a Eurobond issue. The Eurobonds to be issued, are to raise funds for the New External Borrowing of N2.343 trillion (about USD6.2 billion) provided in the 2021 Appropriation Act to part finance the Deficit.

Nigerian Capital Market

  • The Nigerian bourse closed the week on a positive note with some cherry picking and bargain hunting. The NGXASI closed the week with a growth of +0.68%. The Nigerian Stock Exchange gained N137.38bn, year-to-date return moderated to -3.63%, while the market capitalization settled at N20.22 trillion.
  • The volume and value of stocks traded on the exchange this week dipped by -56.66% and -56.41% respectively.
  • Sectoral performance across sectors tracked was broadly negative this week as the NGX-30 was the highest loser for the week with -0.11% while NGX-IND, NGX Consumer Goods, NGX Banking, NGX Oil & Gas and NGX Insurance declined by -0.21%, -0.48%, -0.58%, -0.61% and -1.65% respectively.
  • Market breadth for the week closed negative with 23 gainers led by CUTIX and REGALINS as against 36 losers led by NEIMETH and AIICO


  • The NASD OTC Security Index (NSI) and Market Capitalization closed the trading week with a positive movement in Market capitalization and NSI. The NSI and Market capitalization closed the week at 752.81 points and N654.32 with a growth of +0.04% and +0.04% respectively.
  • Dangote and Toni Index   
  • Dangote Index closed the week negative with 130.66 basis points from 130.93 basis points recorded the previous week, representing a decline of -0.20%.
  • NASCON  recorded a growth of +1.38% while DANGSUGAR recorded a decline of -4.32% respectively while DANGCEM closed the week flat W-o-W.

Table 2: Dangote Index W-o-W Change


Source: NGX

Furthermore, the Toni Index closed negative with 96.52 basis points from 98.08 basis points recorded the previous week, a W-o-W decline of -1.59%.

AFRIPRUD, TRANSCORP, UBA and UBCAP and closed the week negative with -5.51%, -6.86%, -1.35% and -4.29% respectively while TRANSCOHOT closed positive with +9.80% W-o-W.

Table 3: Toni Index W-o-W Change




In the coming week, expectation will be rife in further bargain hunting around the half year earnings season as companies continue to release their results, and impressive earnings reports should spur some interest. However, other macroeconomic developments are likely to impact investors’ decisions.

In addition, we expect investors to monitor the movement of yields in the fixed income market.

About the Author


First Ideas Limited is an investment and financial advisory company established in 1994 to provide advisory services to high net worth individuals, trust funds, financial institutions and medium sized companies in growth sectors.

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