Expectations from the Markets This Week – 040422 – First Ideas Limited

Expectations from the Markets This Week – 040422

Global Economy

  • According to data released by the Bureau of Labor Statistics on Friday, the U.S. economy gained 431,000 jobs in March, signaling a shift toward pre-pandemic employment levels. Meanwhile, Unemployment rate fell to 3.6%. The latest non-farms payroll figure falls short of forecast which came in at 455,000. In February, the jobs report exceeded forecast and the unemployment rate fell to 3.8 percent. The current unemployment rate is within a tenth of a percentage point of February 2020, when the jobless rate fell to a historically low 3.5 percent.
  • US consumer confidence index rose to 107.2 in March from a downwardly revised 105.7 in February. Economists polled by Reuters had expected the index to fall to 107.0 from February’s 110.5.
  • China’s official manufacturing purchasing managers’ index (PMI) fell to 49.5 in March, down from 50.2 in February. Official non-manufacturing PMI, which measures business sentiment in the services and construction sectors, fell to 48.4 from 51.6 in February. Shrinking activity in both China’s manufacturing and services sectors contracted in March, showed amid the ongoing coronavirus resurgence. The official manufacturing purchasing managers’ index (PMI) fell to 49.5, from 50.2 in February,
  • Following the release of EU’s unimpressive CPI data for February, which suggests that euro-zone inflation surged to another record last month, European Central Bank Chief Economist Philip Lane has said net bond-buying will still conclude by the end of September if the current trajectory for prices is maintained.
  • India’s current account deficit (CAD) increased 141% Q-o-Q to hit $23 bn (2.7 per cent of GDP) in the third quarter (Q3) of 2021-22 from $ 9.9 bn (1.3 per cent of GDP) in Q2 of 2021-22 and $ 2.2 billion (0.3 per cent of GDP) a year ago in Q3 of 2020-21. The RBI said on Thursday stated that, the current account deficit was 1.2% of GDP in April-December 2021 as against a surplus of 1.7% in April-December 2020 on the back of a sharp increase in the trade deficit. Meanwhile, Net services receipts increased, both sequentially and on a year-on-year (y-o-y) basis, on the back of robust performance of net exports of computer and business services.

Nigeria Economy

  • Nigeria Sovereign Investment Authority stated on Thursday that the Presidential Infrastructure Development Fund would be utilized to complete four critical projects worth N2.3tn. The Authority also stated that part of the fund was being deployed for the construction of the Lagos-Ibadan Expressway, Abuja-Kaduna-Zaria-Kano Road, Second Niger Bridge and Mambilla hydropower project. The NSIA also disclosed its delivery of 16 security vehicles to the Nigeria Police Force to help boost economic activities on the Abuja-Kaduna-Kano Road.
  • According to an analysis of industry statistics from the Nigerian Communications Commission.
  • In January 2020, there were 83.81 million unused lines in the nation. By January 2022, the number had grown to 108.47 million. The NCC report stated that there were 269,835,804   connected lines in January 2020, of which 185,742,016 were active, and 84,093,788 were inactive. In January 2022, there were 305,623,582 connected lines, of which 197,152,773 were active, and 108,470,809 were inactive.
  • The Kogi State Government through its Internal Revenue Service agency has shut down several critical telecommunications facilities. This was done in order to force telecom operators to pay more taxes and levies. This is likely to cause a potential communications blackout in the whole of Kogi, parts of Abuja, Nassarawa, Benue, Enugu, Anambra, Edo, Ondo, Ekiti, Kwara, and Niger states.
  • The Federal Government on Wednesday said it has identified 12000 shops across 300 markets, shopping plazas/complexes and industrial clusters in the country for electrification under its Energizing Economies Initiative. It disclosed this through the Rural Electrification Agency at a roundtable meeting with EEI private power developers at the headquarters of the REA in Abuja.
  • According to the Federal Ministry of Communications and Digital Economy, 31 million Nigerians live in areas without telecommunication coverage. In 2013 there were 207 such clusters which didn’t have network coverage. The figure declined to 114 in 2019. According to official data, there are 1,954,540 unserved people in Jigawa; 1,639,631 in Kebbi; 1,872,307 in Kaduna; 1,777,778 in Kano; 2,120,389 in Katsina; 1,831,880 in Sokoto; 2,032,764 in Zamfara; 1,430,991 in Adamawa; 2,630,828 in Bauchi; 2,249,301 in Borno; 843,134 in Gombe; 1,100,456 in Taraba; 1,647

Review and Outlook

The decision of the Kogi state government to bar telecommunication operators from their sites threatens the provision of telecommunications services to up to 11 other states. The episode raises a number of questions including but not limited to the problem of arbitrariness in policy and its implication for the country’s drive for attracting domestic and foreign investment; the development also raises questions about the justification for differential rates of the right of way when the network service provider services as many as 11 states with the same facility.

The first quarter of 2021 turned out to be characterized by Russia-Ukraine conflict, although inflation worries had been a major concern since last year, Q1 2022, held great prospects of greater price stability on the back of monetary policy normalization. While all major economies (with the exception of the EU) effectively raised rates signaling the end of many months of accommodative monetary policy, the inflationary worries have not abated.  With the end of the Russian invasion of Ukraine not in sight, higher crude oil prices threaten the global growth prospects for the rest of the year.

Oil and Gas 


  • The Minister of State for Petroleum Resources, Timipre Sylva, in a courtesy visit by the EU ambassadors to Nigeria, declared Nigeria’s interest to become an alternative gas supplier to meet the EU energy needs. However, he identified that a major challenge in the industry is the lack of fresh investment.
  • The Group Managing Director of Nigerian National Petroleum Company Limited, Mele Kyari, has said Nigeria is currently working to move away from dirtier fuels and to build pipelines that would deliver gas from Nigeria to Europe.
  • The Nigerian Customs Service (NCS) has said it is limited in its capacity to fight crude oil theft as the nature of equipment available to the Service function better in shallow waters and creeks. The Service noted that anything beyond those places requires more sophisticated equipment and inter-agency collaboration.
  • Shell Petroleum Development Company (SPDC) has signed an exit agreement to mark the formal ceding of Oil Mining Lease (OML) 11 to the Nigerian Petroleum Development Company (NPDC). A move the Minister of State for Petroleum Resources, Timipre Sylva, described as settling all issues that had hindered the asset from operation in the past 20 years for the benefit of all Nigerians.
  • The Minister at the 2022 Oloibiri Lecture Series and Energy Forum on Thursday also disclosed that about 55% of the over 200 million Nigerians have access to electricity while only 13% have access to clean cooking. His representative, the Permanent Secretary, Federal Ministry of Petroleum Resources, Sani Gwarzo, stated that Nigeria’s goal is energy sufficiency to ensure energy security and end the ravaging energy poverty across the country.
  • The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) on Thursday noted that its four-point strategy of no diversion of the product, no hoarding, no selling in jerry-cans, and discouraging hawking of the product was responsible for restoring normalcy in the distribution of petrol. Some operators have however argued that there is a looming fresh petrol scarcity as petrol transporters are currently hiking fares due to soaring diesel prices.
  • OPEC as part of its modest increase in crude oil supply on Thursday revised Nigeria’s production quota upward from 1.735 mb/d in April to 1.753 mb/d in May 2022. 


  • Oil prices tumbled more than $5 on Monday as fears over weaker fuel demand in China grew after financial hub Shanghai launched a two-stage lockdown to contain a surge in COVID-19 infections.
  • The Junior Petroleum Minister of India-the world’s third-largest oil importer had refuted the news that India will pay in rupees for oil from Russia or any other oil exporter. He noted that India will not pay in rupees for Russian oil for the time being.
  • The European Commission on Wednesday said it is ready to impose new sanctions against the Kremlin over its invasion of Ukraine, with the magnitude of the new sanction depending on Moscow’s stance on gas payments in rubles.
  • The Organization of the Petroleum Exporting Countries and allies including Russia, (OPEC+) have stuck to its plans to add a modest 432,000 b/d of crude oil supply in May, despite Western pressure on Saudi Arabia and the United Arab Emirates to use their spare capacity to boost output further.
  • The U.S. President, Joe Biden, on Thursday, announced a release of 1 mb/d of crude oil for six months totaling 180 million barrels, starting in May from the U.S. Strategic Petroleum Reserve (SPR), a move to curb the rising crude oil prices.
  • President Vladimir Putin of Russia on Thursday signed a decree that requires foreign buyers to pay rubles for Russian gas from April 1 or see their contracts halted, a move to blunt the impact of Western sanctions on Russia’s foreign reserves and boost the value of the ruble.
  • The International Energy Agency (IEA) on Friday agreed to a second coordinated oil release from the members’ strategic reserves in a month to calm markets roiled by Russia’s invasion of Ukraine.
  • Oil prices fell about $1 on Friday, ahead of a meeting of consuming nations to discuss a new release of emergency oil reserves alongside a huge planned release by the United States.
  • Brent had a weekly decline of -12.53% (see Table 1).


Gold dipped by -1.20% while Silver also dipped by -2.83% W-o-W (see Table 1).


  • Cocoa prices inched by +1.17% W-o-W.
  • Corn prices dipped by -1.99% W-o-W while Sugar appreciated by -1.37% (see Table 1).

Table 1: Commodity Prices

Commodity01-Apr-2225-Mar-2231-Dec-21Weekly ChgYTD Chg
Source: CNBC

*Data for 1st April 2022 is as of 05:26 pm (Nigerian Time)


  • In the coming week, oil prices are expected to drop with planned release from the strategic reserves by the United States weighing in on the prices.
  • Gold price is expected to drop in the coming week amid pressure from positive Russia-Ukraine talks.
  • Cocoa prices are expected to grow in the coming week with more demand pushing up prices.
  • 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 N416.17/USD, which indicates a week-on-week (W-on-W) depreciation. The Naira fell by -0.04% at the I&E FX Window but appreciated by -0.91% at the Nigerian Autonomous Foreign Exchange Fixing (NAFEX) spot market (see table 2 below).

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

Average Benchmark Yields
 24-March-2231-March-22% Change
I & E FX Window416.00416.17-0.04%
NAFEX ($/N)415.96415.15-0.91%

Source: FMDQ

Money Market

System liquidity was bolstered by an inflow of N138.29billion from primary market repayment that happened this week, causing interbank rates to decline.

At the close of trading on Thursday, money market rates closed in single-digit, at 5.00% and 4.50% for open repo rate (OPR) and overnight rate (O/N) respectively.  On a w-o-w basis, OPR fell by -59.61% while O/N dropped by -64.00% (see table 3 below).

Table 3: Money Market

 Money Market Rate
 24-March-2231-March-22% Change
OPR (%)12.385.00-59.61%
O/N (%)12.504.50-64.00%

Source: FMDQ

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

Treasury Bills Market

Nigerian treasury bills market was relatively quiet with minimal volumes traded across broad, with the average benchmark closing at +1.58% as of Thursday.

The OMO Bills market was bullish as the average benchmark yields closed the Thursday trading session in the red by -7.83% on a W-on-W basis (see table 4 below).

Table 4: Treasury Bills Market

Average Benchmark Yields
 24-March-2231-March-22% Change
T. Bills (%)3.173.22+1.58%
OMO Bills (%)3.833.53-7.83%

Source: FMDQ

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

FGN Bond Market

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

At the close of trading on Thursday, the overall average benchmark yields closed at 10.72% indicating a W-on-W increase of +0.19% (see table 5 below).

Table 5: FGN Bonds Market

Average Benchmark Yields
 24-March-2231-March-22% Change
Short Tenor7.137.30+2.38%
Mid Tenor10.2810.50+2.14%
Long Tenor11.9012.14+2.02%

Source: FMDQ

FGN Eurobond Market

The Eurobond market was relatively bullish, with buying interest seen across most maturities. The average benchmark yield declined by 9bps to 7.61%.

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 -0.26%. The Nigeria Exchange loss N57.69bn. However, year-to-date return was positive at +9.66%, while the market capitalization settled atN25.25trillion.
  • Sectoral performance across sectors tracked was mixed, at the close of trading on Friday, NGX-LII was the highest gainer for the week with +1.38% while NGX- AFRBVI recorded the highest decline with -7.59%. NGX-Premium, with +1.31%.
  • Market breadth for the week closed negative with 11 gainers led by NAHCO  as against 25 losers led by REDSTAREX

Chart1: Movement of NSEASI Index Points 25MAR 2022- 1 Apr. 2022


The NASD OTC Security Index (NSI) and Market Capitalization closed the trading week with a positive movement.  The NSI and Market capitalization closed the week at 724.49 points and N952.62bn with rise of +0.19%   and +59.53% respectively.






Dangote and Elumelu Index

Dangote Index closed the week positive with 142.49 basis points from 142.58 basis points recorded the previous week, representing a surge of -0.06%.

DANGSUGAR recorded a decline of -1.25%, NASCON, recorded a decline of -1.53%, DANGCEM recorded flat. 

Table 6: Dangote Index W-o-W Change 

Company25-Mar-221-Apr-22WoW Chg

 Source: NGX,

Furthermore, the Elumelu Index closed negative with 109.74 Basis points from 110.72 basis points recorded the previous week, a W-o-W surge by -0.89%

UBA, closed the week positive with +0.65%, TRANSCORP,AFRIPRUD,UBCAP.-8.41%, -3.23%,-2.01%, respectively. TRANSCOHOT Closed flat W-O-W.

Table 7: Elumelu Index W-o-W Change

Company25-Mar-221-Apr-22WoW Chg

 Source: NGX

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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