Market expectation this week 18.04.22 – First Ideas Limited

Market expectation this week 18.04.22

Expectations from the Markets This Week – 180422

Global Economy

  • The European Central Bank (ECB) on Thursday concluded at its latest meeting to take cautious steps towards unwinding accommodative monetary policy while avoiding a hard schedule. It confirmed plans to cut bond purchases, this quarter, then end them at some point in the third quarter. Meanwhile, the bank noted that there is no clear time frame for when rate would be raised.
  • According to the Bureau of Labor Statistics, U.S. Inflation accelerated to 8.5% in March, hitting a Four-Decade High. The monthly growth in SCPI id was 1.2%, the fastest since September 2005 and a significant acceleration from the 0.8% increase in February. While the all-items less food and energy core index rose 6.5%, the energy index rose 32% over the last year, the gasoline index rose 18.3% and the food index increased 8.8 percent.
  • According to data released Wednesday by the Office for National Statistics (ONS) UK inflation rose by 7% in March, the highest rate in 30 years. Inflation had stood at 6.2% in February. The spike in the price level has been attributed to Transport costs, which includes petrol prices, and housing costs which would include heating and electricity.
  • National Bureau of Statistics (NBS) data  released on Monday  shows that China’s producer price index (PPI),  went up 8.3% year on year in March. The figure represents a decline from the 8.8% year-on-year increase registered in February this year. On a monthly basis, China’s PPI rose 1.1% in March, compared with the 0.5% increase in February. The major drivers identified is the price hikes of commodities in the international market. Monday’s data also showed that China’s consumer price index(CPI),  rose 1.5% year on year in March.
  • Latest ONS labour market data revealed that the number of UK workers on payrolls, was up by 35,000 between February and March bringing the employed population to 29.6mn. But this was the smallest monthly gain since February last year. Despite the drop-in unemployment rate, the ONS noted that regular pay excluding bonuses tumbled 1.8% in the three months to February. In February alone, real regular wages dropped 2.1% which was the biggest drop since August 2013, the ONS added. While pay rose four percent in the quarter, it was far outstripped by inflation and experts have warned wages will lag even further behind rising prices this year as inflation is expected to rocket in the autumn.
  • A Reuters poll showed that China’s economic growth would likely slow to 5.0% in 2022 due to renewed COVID-19 outbreaks and a weakening global recovery, raising pressure on the central bank to ease policy further.  The latest forecast growth for 2022 is expected to come in lower than the 5.2% penciled in a Reuters poll in January, as well as the government target of around 5%.
  • According to the Australian statistics bureau, the country recorded its lowest jobless rate in 48 years. The number of unemployed people reduced by 12,000 people in March, while the economy created an extra 18,000 jobs. The Reserve Bank will on the back of the recent data be expected to carry out its first-rate hike since late-2010.

Nigeria Economy

  • The Federal Government is set to conduct the national population census in April 2023. This is expected to hold a month after the general elections billed for February and March 2023. While stating that the Nigeria Population Commission (NPC) would hold a pilot census in June 2022, the Director General of Nigeria Population Commission also noted that the commission will deploy high-level technology during the exercise.
  • The Federal Executive Council has approved N1.4bn for the supply of equipment for the Transmission Company of Nigeria, to boost power supply nationwide. The Minister of Power, Abubakar Aliyu disclosed that the amount in question is meant for the procurement of 132/33 KV substation at Kafanchan, Kaduna State with a KV line base extension at Jos substation, in Plateau State (at the sum of N132,705, 861.42). The disbursement is also meant to fund the supply of handling equipment, haulage, and operational vehicles for the TCN at N1.33bn.
  • A recently released CBN report on the sectoral utilisation of foreign exchange, shows that the Federal Government spent $2.71bn on food imports from January to December 2021. In 2020, the Federal Government spent $1.87bn on food imports, showing an increase of 44.9%. The increase in food import occurred despite the over N864bn intervention made by the CBN under the Anchor Borrowers Programme.
  • In a recently released report, titled “Restructuring debt of poorer nations requires more efficient coordination,” the International Monetary Fund has warned Nigeria and other low-income countries that high public and private borrowing will likely increase financial vulnerability and lead to more inflation as the war in Ukraine is adding risks to unprecedented levels of public borrowing and the pandemic is still straining many government budgets.
  • Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed has said the Federal Government will enforce recovery of N5.2tr debt owed to the Federal Government by over 5,000 debtors through various Ministries, Departments and Agencies, MDAs. The Minister revealed that N53.5 bn has been recovered in the last one and a half years through the Government Integrated Financial Management Information System (GIFMIS).
  • President of the Lagos Chamber of Commerce and Industry LCCI, Dr Michael Olawale-Cole, noted that Insecurity and energy crisis may undermine Nigeria’s 2022 economic growth projections. According to him, the worsening security challenges in many parts of the country threaten the agricultural which is capable of reducing production and contracting production volumes. He bemoaned the problems with the national grid and the implications for Manufacturers and power consumers.

Review and Outlook

The 3.1% real GDP growth projection given by the Central Bank of Nigeria for 2022 is seeming more unlikely to hold given the impact of rising energy cost on real purchasing power, domestic demand, and the operations of businesses.  The spate of insecurity also threatens output in the Agricultural sector. Meanwhile, the CBN approval granted to MTN for the provision of Mobile Money Payment Services holds enormous potentials for the company as well as the fast-growing service sector. Between 2016 and 2021, the ICT sector in Nigeria recorded an average annual growth of 7.6%.

Oil and Gas 


  • The latest Monthly Oil Market Report (MOMR) of the Organisation of the Petroleum Exporting Countries (OPEC) has revealed that Nigeria’s crude oil production declined by 24,000 b/d from 1.378 mb/d in February to 1.354 mb/d in March 2022 based on secondary sources. Based on direct communication, Nigeria’s production declined from 1.258 mb/d in Feb to 1.238 mb/d in March. 
  • The Minister of State for Petroleum Resources, Timipre Sylva, has stated that the April 2023 completion date for the rehabilitation of the Port Harcourt refinery was feasible and that the plant would refine 60,000 b/d of crude by the first quarter of 2023.
  • Nigeria’s crude oil production which is currently challenged by massive crude oil theft and sabotage may be under a bigger threat of losing its top buyers as member countries of the International Energy Association (IEA) are crafting policies to cut their oil demand in the near term. 
  • The Governor of Bayelsa State, Mr. Douye Diri, has accused oil companies and the regulatory agencies of working against the interest of host communities in the Niger Delta. 


  • Oil prices dropped more than $2 a barrel on Monday, following a second straight weekly decline after world consumers announced plans to release a record volume of crude and oil products from strategic stocks and as China’s lockdowns continued.
  • Some European Union Foreign Ministers on Monday disclosed that the Union is drafting proposals for an oil embargo on Russia for its invasion of Ukraine. However, there is currently no agreement among member countries on the oil embargo.
  • The Secretary-General of OPEC, Mohammad Barkindo, has told the European Union that the current and future sanctions on Russia could create one of the worst global oil supply shocks as it would be impossible to replace the Russian volumes. Essentially, a signal that OPEC would not pump more.
  • The OPEC’s MOMR showed that the 13 OPEC members’ oil production averaged 28.56 mb/d in March, higher by 57, 000 b/d month-on-month. While crude oil production increased in Saudi Arabia, Kuwait, and the United Arab Emirates, it declined in Libya, Nigeria, and Congo.
  • Russia Energy Minister, Nikolay Shulginov, has disclosed that Russia is ready to sell crude oil at any price to friendly countries. Analysts believe the move could further divide the EU’s position on Russia’s oil embargo as countries scramble for the discounted oil. 
  • Oil prices slipped on Thursday amid thin trading volumes ahead of a public holiday, as traders weighed a larger-than-expected build in U.S. oil stocks against tightening global supply.
  • Brent had a weekly growth of +7.82% (see Table 1).


Gold inched up by +1.31% while Silver dipped by +3.12% W-o-W (see Table 1).


  • Cocoa prices declined by -1.71% W-o-W.
  • Corn prices inched up by +2.90% W-o-W while Sugar prices dropped by -1.87% (see Table 1).

Table 1: Commodity Prices

Commodity14-Apr-2208-Apr-2231-Dec-21Weekly ChgYTD Chg
Source: CNBC

*Data for 14th of April 2022 is as of 05:35 pm (Nigerian Time)


  • In the coming week, oil prices are expected to remain elevated as threat to supply continue to intensify.
  • Gold price is expected to rise in the coming week amid buying pressure forces upward price push.
  • Cocoa prices are expected to ease as demand stabilizes
  • Sugar prices are expected to rise in the coming week as higher energy prices could force mills to divert cane to ethanol production.
  • Corn prices are expected to rise as demand outpaces supply as countries such as India work to meet rising global demand.

Fixed Income and Money Market 
Currency Market

This week, the Naira traded both ways at the close of trading on Thursday.  The Naira closed at N417.5/USD in the I&E FX window on Thursday, indicating a +0.20% week-on-week (W-on-W) depreciation of the legal tender. At the Nigerian Autonomous Foreign Exchange Fixing (NAFEX) window naira appreciated by -0.17% W-on-W, closing at N415.50/USD (see table 2 below).

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

Average Benchmark Yields
 07-April-2214-April-22% Change
I & E FX Window416.67417.5+0.20%
NAFEX ($/N)416.34415.65-0.17%

Source: FMDQ

Money Market

Money market rate closed negative this week amidst the elevation in system liquidity. At the close of trading on Thursday, money market rates closed at 10.83% and 11.17% for open repo rate (OPR) and overnight rate (O/N) respectively. OPR declined by -51.52% while O/N declined by -48.52% w-o-w (see table 3 below).

Table 3: Money Market

Money Market Rate
 07-April-2214-April-22% Change
OPR (%)5.2510.83-51.52%
O/N (%)5.7511.17-48.52%

Source: FMDQ

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

Treasury Bills Market

This week, the Nigerian treasury bills market closed with bullish sentiment across all bills. On Thursday, the average benchmark yields for TBs fell by -0.31% W-o-W to 3.26, while yield on OMO bills fell by -0.28% W-o-W to 3.52 (see table 4 below).

Table 4: Treasury Bills Market

Average Benchmark Yields
 07-April-2214-April-22% Change
T. Bills (%)3.273.26-0.31%
OMO Bills (%)3.533.52-0.28%

Source: FMDQ

Nigerian Capital Market


  • The Nigerian bourse ended the week on a positive note as market sentiment turned green.  The NGXASI closed the week with +1.88% gain as the Nigerian Exchange gained N473.83bn in naira terms.
  • Year-to-date, the NGSAXI remained positive to close the week with+11.22% gain as the market capitalization settled at N25.61trn at the end of the week.
  • Sectoral performance across sectors tracked was bullish. At the close of trading on Thursday, NGX- Banking recorded the highest gain for the week with +5.59% as NGX-AFRBVI, NGX-MERIVAL and NGX-CG also grew by +5.52%, +5.31%, +3.61% respectively.
  • Market breadth for the week closed positive with 51 gainers led by DNMEYER  as against 18 losers led by  ACADEMY


The NASD OTC Security Index (NSI) and Market Capitalization closed the trading week on a positive note.  The NSI and Market capitalization closed the week at 780.25 points and N1,025.93bn with rise of +5. 60%   each respectively.

Dangote and Elumelu Index

Dangote Index closed the week positive with 145.67 basis points from 142.30 basis points recorded the previous week, representing a growth of +2.37%

 DANGSUGAR,DANGCEM and NASCON recorded growth of +2.38%, +2.26% and +1.70% WoW respectively.

Table 6: Dangote Index W-o-W Change 

Company08-Apr-2214-Apr-22WoW Chg

Source: NGX

 Furthermore, the Elumelu Index closed positive wat 115.34 Basis points from 111.94 basis points recorded the previous week, representing a growth of +3.04% WoW 

UBA, TRANSCORP, and UBCAP closed the week positive with +4.46%, +1.oo% and +1.15% respectively while AFRIPRUD, TRANSCOHOT closed flat WoW.

Table 7: Elumelu Index W-o-W Change

Company08-Apr-2214-Apr-22WoW Chg

Source: NGX

Chart1: Movement of NSEASI Index Points 8APR 2022- 14Apr. 2022

Proshare Nigeria Pvt. Ltd.

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

FGN Bond Market

The local bond market was bearish this week, with selling pressure seen across broad. At the close of trading on Thursday, the overall average benchmark yields closed at 11.01% indicating a W-on-W increase of +1.47% (see table 5 below).

Average Benchmark Yields
 07-April-2214-April-22% Change
Short Tenor (%)7.057.24+2.70%
Mid Tenor (%)10.6710.97+2.83%
Long Tenor (%)12.4012.47+0.53%

Source: FMDQ, Proshare Research 

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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