market expectations – First Ideas Limited

market expectations

_Expectations from the Markets This Week – 250422

Global Economy

  • According to the latest IMF forecast, the UK is expected to record a 1.2% growth in 2023, making it the worst performance among G7 economies next year. This is due to the cost-of-living crisis and tax increases projected both of which would slow economic activity. The US, Japan, Germany, France, Italy, and Canada are all forecast to grow faster according to the fund.  Britain’s economy which grew by 7.5% in 2021 is expected to rise by 3.8% in 2022.
  • Japan exports rose 14.7% YoY to JPY 8461B in March, making the 13th straight month of rising, reflecting robust demand for semiconductor manufacturing devices in Taiwan and steel product shipments to Vietnam. Imports rose 31.2% YoY to JPY 8873B. Petroleum imports jumped 69.7% YoY, the 12th straight month of rising. Trade deficit came in as JPY -412B, the 8th straight month of deficit, the longest streak since 2015.
  • According to China’s National Bureau of Statistics released the economic figures for Q1 2021 real GDP growth reached 4.8 %, exceeding market expectation and the 4 % growth recorded in the fourth quarter of 2021. The world’s second-largest had a good start in the first two months of 2022. Driven by a series of proactive macro policies, the manufacturing Purchasing Managers’ Index (PMI) exceeded 50 in January and February. However, since March, the pandemic and the Ukraine crisis have been impacting the stable recovery of China’s economy
  • The International Monetary Fund (IMF) on Monday revised upward the economic growth outlook for the UAE in 2022 and warned that damage from Russia’s invasion of Ukraine will set back global recovery and contribute to a significant slowdown in worldwide growth this year. The IMF now estimates that the UAE’s economy grew 2.3 % in 2021 and forecast growth to accelerate to 4.2 % in 2022 — up from its previous forecast of 3.5 %. The latest IMF projection aligns with the forecast made by the Central Bank of the UAE for 2022. In 2023, the UAE is projected to grow 3.8 %, the latest data released by IMF’s World Economic Outlook shows.
  • The Reserve Bank of Australia says rising inflation and wage growth have brought forward the timing of its first interest-rate rise since 2010, apparently supporting the view of economists expecting a June hike. Underlying inflation rose to 2.6% in the December quarter and minutes from the RBA’s April 5 board meeting, released on Tuesday, showed that members discussed how recent increases in fuel, food, and other commodity prices would further raise the cost of living in coming quarters.

Nigeria Economy

  • According to economists at Agusto Consulting a fourth of the planned capital expenditure in the 2022 Appropriation Act, may not be funded. The Budget which plans N14.7tn spending in 2022 comprises N3.9tn as interest on loans, N0.9tn on statutory transfers, on payroll, and unfunded pension, N1.4tn on other recurrent expenditures, and N4.5tn on capital expenditure. Meanwhile, the government is projected to only generate N5.5tn through revenue, N0.4tn from external borrowing, N4tn from the markets, and from the Central Bank of Nigeria, making a total of N13.9tn.
  • The World Bank has projected that the number of poor people in Nigeria and other Sub-Saharan African countries can hit 463.6 million in 2022 due to the COVID-19 pandemic and the ongoing war in Ukraine. The World Bank showed that the baseline projection for poor people in Sub-Saharan Africa is 460.4 million, while the pessimistic projection is N463.6 million in 2022.
  • In a recently released Economic Report for November 2021, the Central Bank of Nigeria, CBN, stated that consumer credit rose 40% year-on-year, YoY, to N2.1 tn in November last year from N1.5tn in November 2020, driven by an improvement in the volume of economic activities.  Meanwhile, consumer credit accounted for 8.9% of the total credit to the private sector at the end of the month.
  • The body of the Attorneys-General of the Federation has warned the Federal Government not to tamper with funds accruing to the States and the 774 local councils in its bid to settle $418 mn London/Paris Club Loan refund-related judgment debts. According to the states they were not parties to the suit and so cannot be liable for the judgment debt.
  • In its ‘World Economic Outlook: War Sets Back the Global Recovery, April 2022,’ report the IMF upgraded Nigeria’s economic growth forecast to 3.4%. Earlier in a January 2022 report, the Washington-based lender had predicted a growth rate of 2.7% for Nigeria FY2022. But it has since adjusted its projection based on increasing oil prices. In its latest forecast, the body revealed a 3.1% growth projection for the nation in 2023, down from 3.4% in 2022 and 3.6% in 2021. 

Review and Outlook

Nigeria’s growth outlook was upwardly reviewed by the World bank from 2.7% as per its January 2022 forecast to 3.4% in its latest report. The premise of the projection is however questionable. The World bank wrongly presumed that Nigeria would ramp up production to take advantage of the high crude oil prices. The expected growth is likely in the Mining sector which ironically has recorded negative growth for consecutive quarters and as recently as March 2022 had oil production come in at 1.45mbpd, much lower than expected due largely to vandalism and oil theft.

Meanwhile, a bunch of Q1 GDP data will be released in the coming week from the US, eurozone, South Korea to Taiwan. The Manufacturing PMI will also offer a first look into China’s manufacturing health amid the latest COVID-19 disruptions. The eurozone inflation reading will also be awaited while Australia and Singapore CPI figures will likewise be released. 

Oil and Gas 


  • Stakeholders in the oil and gas sector have called for an end to the importation of liquefied petroleum gas (LPG) given the country’s 206 trillion standard cubic feet of natural gas reserves and the N250 billion Central Banks of Nigeria (CBN) gas interventions fund.
  • Analysts at BusinessDay have argued that the rising oil theft and pipeline vandalism in the country are limiting the volume of gas the NLNG Limited can supply to the domestic and export markets, threatening the N187 billion dividend expected by the Federal Government from the company in 2022.
  • The Minister of State for Petroleum Resources, Timipre Sylva, has stated that the Federal Government is looking to complete the multi-billion-dollar Brass Liquefied Natural Gas project that has been abandoned over 17 years ago. Analysts believe the project may not materialize under this administration given that the government is still in search of investors to revive the stalled gas project.
  • The Minister, at a stakeholders’ consultation forum on draft regulations under the Petroleum Industry Act (PIA) 2021, also emphasized the need for effective regulations in harnessing the gains of the PIA for global relevance.
  • The House of Representatives has urged the Nigerian National Petroleum Company Limited (NNPC) to maintain the daily distribution of 90 million litres of petrol across the country until normalcy is restored. The House also exonerated the four oil marketers/importers indicted for the adulterated fuel. 


  • Oil prices rose more than 1% on Monday, with Brent crude topping $114 a barrel, as outages in Libya deepened concern over tight global supply amid the Ukraine crisis.
  • Libya’s National Oil Company (NOC) has declared force majeure on a key Libyan oil field, the 300,000 b/d Al-Sharara oil field, amid protests that had earlier shut down production at two ports and the El Feel oilfield on Sunday. The shutdown in Libya could see the country’s oil production decline by about 50% from its 1.2 mb/d production level.
  • The Biden Administration in the US said it has resumed plans for oil and gas development on federal lands, a move that would see the government lease fewer acres for drilling than initially proposed, charge steeper royalties to oil and gas companies, and assess the climate impact of developing the acreage.
  • Russia’s Foreign Minister, Sergey Lavrov, in a statement issued to clarify the rubles-for-gas mandate, disclosed that buyers will have to pay Gazprombank in the currency of their choice and Gazprombank will then convert the payment into rubles. He added that buyers will no longer be able to pay for gas using Gazprom’s bank accounts abroad since the account would be frozen by sanctions.
  • Meanwhile, Ukraine has called on Europe to reroute its 55 billion cubic meters per year of Russia’s shipments of natural gas from the Nord Stream 1 pipeline to Ukraine’s pipeline to increase Kyiv’s leverage in its conflict with Russia.
  • German Foreign Minister, Annalena Baerbock, has disclosed that Germany will halve Russian oil imports by summer and cease importing the oil entirely by the end of 2022.
  • U.S. Treasury Secretary, Janet Yellen, has argued that a full and immediate EU ban on Russian oil and gas imports could have unintended economic consequences for the US and its Western allies.
  •  The Organisation of Petroleum Exporting Countries (OPEC) said it expects global oil demand to increase by about 3.7 mb/d to average 100.5 mb/d on the back of strong demand from the OECD countries.
  • Oil prices extended losses on Friday, burdened by the prospect of interest rate hikes, weaker global growth, and COVID-19 lockdowns in China hurting demand, even as the European Union weighed a ban on Russian oil.
  • Brent had a weekly decline of -2.42% (see Table 1).


Gold dropped by -1.80% while Silver dipped by -5.02% W-o-W (see Table 1).


  • Cocoa prices declined by -3.82% W-o-W.
  • Corn prices inched up by +1.02% W-o-W while Sugar prices dropped by -3.86% (see Table 1).

Table 1: Commodity Prices

Commodity22-Apr-2214-Apr-2231-Dec-21Weekly ChgYTD Chg
Source: CNBC

*Data for 22th of April 2022 is as of 06:01 pm (Nigerian Time)


  • In the coming week, oil prices are expected to decline in the coming week as global demand slows.
  • Gold price is expected to drop in the coming week amid expectation of interest rate hike.
  • Cocoa prices are expected to drop as global demand stabilizes
  • Sugar prices are expected to drop in the coming week as countries subsidies cools down price surge to encourage production.
  • Corn prices are expected to rise as demand still outpaces supply.

Fixed Income and Money Market 
Currency Market

For most of the trading session this week, Naira depreciated both at the I & E FX window and the Nigerian Autonomous Foreign Exchange Fixing (NAFEX) market.

On Friday, the Naira closed at N418.33/USD at the I & E window, indicating

 a -0.20% depreciation week-on-week (W-on-W) and 416.67  at the NAFEX window,

a -0.23% W-on-W decline (see chart 2 below).

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

Average Benchmark Yields
 14-April-2222-April-22% Change
I & E FX Window417.5418.33-0.20%
NAFEX ($/N)415.65416.62-0.23%

Source: FMDQ

Money Market

System liquidity was bolstered by funding inflow that happened this week, causing money market rates to decline.

At the close of trading on Friday, open repo rate (OPR) closed at 5.67% while overnight rate (O/N) closed at 5.00%. OPR decreased by -49.24% W-on-W and O/N decreased by -53.83% W-on-W (see table 3 below).

Table 3: Money Market

Money Market Rate
 14-April-2222-April-22% Change
OPR (%)10.835.67-49.24%
O/N (%)11.175.00-53.83%

Source: FMDQ

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

Treasury Bills Market

The Nigerian treasury bill was relatively bearish with selling interest seen across maturities. The average benchmark rose by +11.35% on a W-o-W basis to 3.63 while yield on OMO bills rose by +9.38% W-o-W to 3.85 (see table 4 below).

Table 4: Treasury Bills Market

Average Benchmark Yields
 14-April-2222-April-22% Change
T. Bills (%)3.263.63+11.35%
OMO Bills (%)3.523.85+9.38%

Source: FMDQ

We expect further increase in the TB yields given an expected tight liquidity situation in the market.

FGN Bond Market

The local bond market was bearish this week, with selling pressure seen across broad.

At the close of trading on Friday, the overall average benchmark yields closed at 11.14% indicating a W-on-W increase of +1.21% (see table 5 below).

Table %: FGN Bond Market

Average Benchmark Yields
 14-April-2222-April-22% Change
Short Tenor7.247.62+5.25
Mid Tenor10.9711.07+0.91%
Long Tenor12.4712.51+1.96%

Source: FMDQ

Nigerian Capital Market

  • The Nigerian bourse ended the week on a positive note as market sentiment remained positice.  The NGXASI closed the week with +2.00% gain as the Nigerian Exchange gained N511.76bn in naira terms.
  • Year-to-date, the NGSAXI remained positive to close the week with+13.44% gain as the market capitalization settled at N26.13trn at the end of the week.
  • Sectoral performance across sectors tracked was bullish. At the close of trading on Friday, NGX-Oil and Gas recorded the highest gain for the week with +6.36% as NGX-AFRHDYI, NGX-MERIGRW and NGX-Consumer Goods also grew by +5.25%, +2.67%, +3.31% respectively while NGX- Insurance recorded the highest loss for the week with -0.05%
  • Market breadth for the week closed positive with 50 gainers led by DNMEYER  as against 29 losers led by  ACADEMY

Chart1: Movement of NSEASI Index Points 14APR 2022- 22Apr. 2022

Proshare Nigeria Pvt. Ltd.


The NASD OTC Security Index (NSI) and Market Capitalization closed the trading week on a negative note.  The NSI and Market capitalization closed the week at 767.28 points and N1, 008.88bn with decline of -1.66%   each respectively.

Dangote and Toni Index

Dangote Index closed the week positive with 148.39 basis points from 145.67 basis points recorded the previous week, representing a growth of +1.87%

DANGSUGAR,  DANGCEM and NASCON recorded growth of +0.63%, +1.93% and +0.42% WoW respectively.

Table 6: Dangote Index W-o-W Change

Company14-Apr-2222-Apr-22WoW Chg

Source: NGX,

Furthermore, the Elumelu Index closed negative at 114.95 Basis points from 115.34 basis points recorded the previous week, representing a decline of -0.34% WoW 

TRANSCORP, and  UBCAP closed the week positive with +0.99%, +1.89%  UBCAP  closed the week negative with -1.22% respectively while AFRIPRUD, TRANSCOHOT closed flat WoW.

Table 7: Elumelu Index W-o-W Change

Company14-Apr-2222-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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