Global Economy

• US Labor Department reported that only 187,000 people filed for unemployment last week. The figure was down roughly 28,000 from the previous week. The figures show a stark turnaround in the job market in the US since the start of the coronavirus pandemic. The last time jobless claims fell this low was 1969 suggesting that the situation with the US labour market is improving but at the same time raising concerns about wage inflation.
• Recent figures from the Office for National Statistics showed a surge in the UK’s consumer prices index (CPI) from 5.5% in January to 6.2% in February, fuelled by the rising cost of petrol and diesel as well as a wide range of goods from food to toys and games. The February inflation figure was higher than the 5.9% predicted by a Reuters poll of economists, showing that Britain’s cost of living squeeze intensified further last month.
• Official ONS data also showed on Friday, that British retail sales unexpectedly fell in February as online shopping dropped back to its levels at the start of the Covid-19 pandemic and surging fuel prices took up a bigger chunk of household budgets. Meanwhile, sales volumes were down by 0.3% from January.
• South Africa Reserve bank raised its benchmark interest rate for a third straight meeting and hinted that it will raise borrowing costs more aggressively through to 2024, in a bid to counter inflationary pressures stemming from Russia’s war with Ukraine. The implied policy rate path of the central bank’s quarterly projection model, which the monetary policy committee uses as a guide, suggests a rate of 5.06% by year-end.

Nigeria Economy

• In its ‘A Better Future for All Nigerians: Nigeria Poverty Assessment 2022’ report released on Tuesday; the World Bank has disclosed in a new report that four in 10 Nigerians live below the national poverty line.  The Washington-based Bank also said that the government’s poverty reduction efforts were hampered by sluggish growth, low human capital, labour market weaknesses, and exposure to shocks. According to the report, only about 17% of Nigerian workers hold jobs capable to lift people out of poverty.
• According to a communique issued at the end of the FAAC meeting which held on Tuesday, the Federation Account Allocation Committee shared the sum of N590.546bn to the three tiers of government for the month of February, representing an increase of N15.8bn when compared to the N574.7bn distributed in January.  The FAAC allocations to the three tiers of government saw the Federal Government receive N236.1bn, the State Governments get N190bn, and the Local Government Councils receive N140.6bn.
• Data from the National Bureau of Statistics reveals that the value of capital importation into Nigeria fell by 30.78% Y-o-Y from $9.68bn FY 2020 to $6.7bn FY2021. In the same report, fourth quarter capital importation in 2021, came in at $2.18bn from $1.73bn in Q3 2021 which represents an increase of 26.34% Q-o-Q. Portfolio investment accounted for 50.52% ($3.39bn) of total capital importation, while Other Investment accounted for 39.03%  ($2.61bn) of total capital imported and Foreign Direct Investment, accounted for 10.43% ($698.78m).
• The International Monetary Fund has advised the Central Bank of Nigeria to scale back its credit intervention programmes as they are likely to cause market distortions in the long run. The Washington-based lender in its report titled, ‘Nigeria Staff Report for the 2021’ said that as recovery firms up, the CBN also needs to scale back its credit intervention programmes, which has accounted for about 45% of credit growth since 2020-significantly above the average of 12% levels in pre-pandemic years.

Review and Outlook

The highlight of the week was the release of Capital Importation data by the National Bureau of Statistics. Despite the global recovery in 2021, capital importation fell by 30.78% Y-o-Y from $9.68bn FY 2020 to $6.7bn FY2021. In the specific case of FDI, it fell by a massive 31.95% from $1.027bn to $698m. Hot money capital importation also slumped by 33% coming in at $3.4bn as against $5.1bn in 2020. The continuous dip in capital imports is indicative of the several challenges faced by investors including but not limited to multiple exchange rates, high inflation and structural bottlenecks.

Next week, March manufacturing PMI data will be released around the globe to give us as sense of manufacturing conditions one month after the Russia-Ukraine war commenced, a development which sent commodity prices surging. Also, next week, February’s US non-farm payrolls, unemployment and wage growth data will be released projections currently point to a 450,000 non-farm payroll gain, down from 654,000 previously.

Oil and Gas 

Domestic

• Data released by the National Bureau of Statistics (NBS) reveals that the average retail price paid by consumers for Premium Motor Spirit (petrol) increased to an average of N170.42 in February from N166.40 in January 2022.
• The House of Representatives Committee on Public Accounts wrote to the GMD of Nigerian National Petroleum Company Limited, Mr. Mele Kyari, over audit queries issued against the NNPC and its 17 subsidiaries. The committee had accused the NNPC of shielding its subsidiaries from honouring summons to appear before it and answer the audit queries.
• The Economist Intelligence Unit (EIU) in a recent investors’ note opined that Nigeria tapped into the international debt market last week for a Eurobond sale of $1.25bn with yields at 8.5% to pay for its petrol supplies following the fuel shortages occasioned by the importation of bad fuel early in the year.
• The Monetary Policy Committee of the Central Bank of Nigeria on Monday decried the strenuous impact of the increasing oil thefts on the accretion of the country’s foreign exchange reserves and government revenue.
• Following the expression of displeasure by some operators in the oil industry about the increasing rate of oil theft, the federal government said it has set up a panel of experts to audit the activities of oil companies in the upstream petroleum industry in the last two years to ascertain the actual volume of crude oil stolen by vandals.
• Players in the oil sector at a stakeholders’ engagement in Abuja on Tuesday resolved that the integration of Modular/Artisanal Refinery Operations into the sector will help to solve the challenges of the fuel crisis in the country.
• Shell Petroleum Development Company (SPDC) disclosed that it has filed an appeal against an Owerri High Court judgment that ordered it to pay N800 billion compensation to a community in Rivers State over an alleged oil spill.
• The Force Commander, Joint Task Force (JTF), South-South Operation Delta Safe, Rear Admiral Aminu Hassan, in an assessment report noted that the multi-agency force covering 10 states and 12 security agencies has succeeded in dismantling storage tanks, removing tapping points, and clamping down on illegal refineries in some communities of Delta, River, and Bayelsa State, but yet face terrain/distance challenges.
• The Nigerian Upstream Petroleum Regulatory Commission has disclosed that the total value of Nigeria’s crude oil stolen between January 2021 and February 2022 is estimated at $3.27bn. The commission attributed the theft to inadequate security, poor community engagement, economic challenges, poor surveillance, stakeholder compromises, and exposed facilities.

Foreign

• Oil prices jumped $3 on Monday, with Brent above $110 a barrel, as European Union nations consider joining the United States in a Russian oil embargo, while a weekend attack on Saudi oil facilities caused jitters.
• Russian energy giant, Gazprom, said it continues to supply gas to Europe through Ukraine in line with requests from European consumers. The company said the order stood at 106.6 million cubic meters for 20 March 2022.
• The European Union’s foreign ministers remain split on whether and how to slap sanctions on Russia’s energy sector over its invasion of Ukraine, with Germany saying the bloc is too dependent on Russian oil to decide an embargo.
• Top executives of the world’s largest independent oil traders-Vitol, Gunvor, and Trafigura observed that Europe risks exposure to systemic diesel supply shortage which could worsen and even lead to rationing of fuel in case of sanction on the Russian oil sector.
• President Vladimir Putin of Russia said the country will seek payment in rubles for gas sold to unfriendly countries, a move that sent European gas prices soaring on concerns it would exacerbate the region’s energy crunch.
• The Organization of Petroleum Exporting Countries and its allies have warned that the EU’s embargo on Russian oil imports would hurt European consumers.
• Some world’s biggest oil traders expect oil prices to exceed $200 per barrel by the end of the year, arguing that oil producers in Africa and US shale patch would struggle to replace Russian crude going off the market.
• The transatlantic partners have said the US will work to supply 15 billion cubic metres of LNG to the EU this year to help wean Europe off Russian gas supplies. According to Reuters, the EU is aiming to cut its dependency on Russian gas by two-thirds this year and end all Russian fossil fuel imports by 2027.
• Oil prices inched lower on Friday as supply concerns eased as countries in the European Union remained split on imposing an oil embargo on Russia while the United States and allies considered releasing more oil from storage to cool markets.
• Brent had a weekly growth of +10.88% (see Table 1).

Metals

Gold Inched up by +1.21% while Silver also inched by +1.89% W-o-W (see Table 1).

Agriculture

• Cocoa prices inched by +1.38% W-o-W.
• Corn prices appreciated by +1.45% W-o-W while Sugar appreciated by +3.75% (see Table 1).

Table 1: Commodity Prices

Commodity	25-Mar-22	18-Mar-22	31-Dec-21	Weekly Chg	YTD Chg
Brent	119.28	107.58	78.54	10.88%	51.87%
Gold	1952.2	1928.9	1827.1	1.21%	6.85%
Silver	25.58	25.105	23.27	1.89%	9.93%
Cocoa	2571	2536	2546	1.38%	0.98%
Corn	752	741.25	595.5	1.45%	26.28%
Sugar	19.65	18.94	18.83	3.75%	4.35%
Source: CNBC

*Data for 25^th March 2022 is as of 06:54pm (Nigerian Time)

Outlook

• In the coming week, oil prices are expected to rise with Western sanctions on Russia affecting supply of Russian oil to the market.
• Gold price is expected to rise in the coming week as countries look to boycott Russian gold.
• Cocoa prices are expected to grow in the coming week with concerns of global market impact of Ukrainian conflict.
• Sugar prices are expected to drop in the coming week as increased export could cover demand.
• Corn prices are expected to rise as demand outpaces supply.

Fixed Income and Money Market 

Currency Market

This week, the Naira was mixed at the I & E FX window, as we saw a seesaw movement in the market.

On Thursday, the Naira closed at the N416.00/USD, which indicates a week-on-week (W-on-W) appreciation. 

Table 2: Naira/Dollar at the I&E FX Window and NAFEX Market

Average Benchmark Yields
	17-March-22	24-March-22	% Change
I & E FX Window	416.67	416.00	+0.16%
NAFEX ($/N)	416.83	415.96	+:0.21%

Source: FMDQ

Money Market

The money market had outflows and inflows; however, rates were buoyed by the N297.01bn FGN bond auction settlement that happened in the week.

At the close of the trading on Thursday, open repo (OPR) and overnight rates (O/N) settled at 12.38% and 12.50% respectively indicating a W-o-W rise of +37.56% and +29.27% (see table 3 below).

Table 3: Money Market

Money Market Rate
	18-March-22	24-March-22	% Change
OPR (%)	9.00	12.38	+37.56%
O/N (%)	9.67	12.50	+29.27%

Source: FMDQ

We expect rates to hover around current levels barring any significant outflows from the Apex bank.

Treasury Bills Market

For the most part trading this week, the Nigerian Treasury Bills market was quiet, with average benchmark yields remaining unchanged.

At the close of trading on Friday, the market was bullish with buying interest seen across maturities. Average benchmark yields for T. Bills fell by -2.16%, benchmark yields on OMO bills remained unchanged on a W-on-W basis (see table 4 below).

Table 4: Treasury Bills Market

Average Benchmark Yields
	18-March-22	24-March-22	% Change
T. Bills (%)	3.24	3.17	-2.16%
OMO Bills (%)	3.83	3.83	0.00%

Source: FMDQ

We expect activity next week to be weak depending on the market liquidity situation. 

At this week’s bond auction, the DMO offered N150.00 billion worth of FGN JAN 2026 and FGN JAN 2042, with stop rates of 10.15% and 12.70%, respectively. The subscription stood at N598.42 billion, while N296.37 was allotted.

FGN Bond Market

The local bond market swayed sideways this week, with investors cherry-picking on securities.

 At the close of trading on Friday, the overall average benchmark yields closed at 10.45%, benchmark yield falling by -0.29% (see table 5 below).

Table 5: FGN Bonds Market

Average Benchmark Yields
	10-March-22	18-March-22	% Change
Short Tenor	7.50	6.84	-8.80%
Mid Tenor	10.02	10.16	+1.40%
Long Tenor	11.63	11.76	+1.12%

Source: FMDQ

FGN Bond Market

The local bond market was relatively bearish this week, with sell interest seen across maturities.

At the close of trading on Friday, the overall average benchmark yields closed at 10.70%, benchmark yield rose by +2.39% (see table 5 below).

Table 5: FGN Bonds Market

Average Benchmark Yields
	18-March-22	24-March-22	% Change
Short Tenor	6.84	7.13	+4.24%
Mid Tenor	10.16	10.28	+1.18%
Long Tenor	11.76	11.90	+1.19%

Source: FMDQ

FGN Eurobond Market

The Eurobond market was relatively bearish this week, with selling seen across most maturities. As of Thursday, the average benchmark yield inched up by 8bps to 8.12%.

Nigerian Capital Market

• The Nigerian bourse ended the week on a negative note while market sentiment bearish, albeit with occasional bargain hunting.  The NGXASI closed the week on a negative note it dipped by -0.67%. The Nigeria Exchange loss N171.62bn. However, year-to-date return was positive at +9.94%, while the market capitalization settled atN25.31trillion.
• Sectoral performance across sectors tracked was mixed, at the close of trading on Friday, NGX-AFRHDYI was the highest gainer for the week with +1.81% while NGX- AFRBVI recorded the highest decline with -3.91%. NGX-IND, NGX-LII closed the week with +0.14%, +0.12%, respectively.
• Market breadth for the week closed negative with 13 gainers led by PZ  as against 20 losers led by NNFM

Chart1: Movement of NSEASI Index Points 18 MAR 2022-25 MAR. 2022

NASD OTC 

The NASD OTC Security Index (NSI) closed with a positive movement while Market Capitalization closed the trading week with a negative movement.  The NSI and Market capitalization closed the week at 723.12 points and N597.13bn with of +1. 82%   and-0.71% respectively.

 

Dangote and Elumelu Index

Dangote Index closed the week positive with 142.58 basis points from 142.54 basis points recorded the previous week, representing a surge of +0.03% DANGSUGAR recorded a rise of +1.27%, NASCON, recorded a decline of -2.96%, DANGCEM recorded flat.

 Table 6: Dangote Index W-o-W Change 

Company	18-Mar-22	18-Mar-22	WoW Chg
DANGCEM	273.5	273.5	0.00%
DANGSUGAR	15.8	16	1.27%
NASCON	13.5	13.1	-2.96%

Source: NGX,

Furthermore, the Elumelu Index closed negative with 110. Basis points from 120.39 basis points recorded the previous week, a W-o-W surge by -8.03%

AFRIPRUD, closed the week positive with +3.33%, TRANSCOHOT, TRANSCORP,UBA,UBCAP.-6.14%, -1.30%,-11.56%, 0.80%  

Table 7: Elumelu Index W-o-W Change

Company	18-Mar-22	18-Mar-22	WoW Chg
AFRIPRUD	6	6.2	3.33%
TRANSCOHOT	5.38	5.31	-1.30%
TRANSCORP	1.14	1.07	-6.14%
UBA	8.65	7.65	-11.56%
UBCAP	12.55	12.45	-0.80%

 Source: NGX