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| Nigeria’s headline inflation rate eased to 33.4% in July 2024, marking the first decline in 19 months, down from 34.19% in June. Despite this monthly decrease, the inflation rate remains significantly higher year-on-year, up 9.32 percentage points from 24.08% in July 2023. Food inflation rose to 39.53% year-on-year, driven by higher prices for staples like semovita and yam flour, although it slightly decreased month-on-month. Core inflation, excluding volatile items, increased to 27.47%, largely due to the deregulation of PMS after subsidy removal. Regional disparities were notable, with Bauchi experiencing the highest year-on-year inflation at 46.04%, while Benue had the slowest rise at 27.28%. Month-on-month, Abuja led with the highest inflation rate at 3.91%, while Taraba saw the slowest increase at 0.71%. Money Market Market liquidity opened the day at ₦32.96 billion long. The Open Buy Back (OBB) rate and the Overnight (OVN) rate closed at 32.30% and 32.98%, respectively. We expect rates to remain around current levels. Treasury Bills Market The FGN Treasury Bills Market traded on bullish sentiments throughout the week despite the system illiquidity. Activity remained skewed to the Feb to March bills offered at the 22% handle. There was also demand for the 22 May bill and the 7 Aug bill bid at 20.65% while offers remained scarce. In addition, the May/June OMO bills garnered attention with the 20th & 27th May bills quoted 24.60/24.10 and the 3 June 23.80/23.40. We expect a calm start to the week. FGN Bond Market The FGN Eurobond Market witnessed a mildly flattish session at the start of the week as investors adopted a cautious approach ahead of United States macroeconomic data. The producer price index data printed at 2.4% vs. 2.7% expected and 3% previous. The CPI year-on-year print came in below expected at 2.9% versus 3% expected and 3% prior. Retail sales increased month on month by 1% versus 0.3% expected while the initial jobless claims declined to 227K versus 234K prior. Overall, it was a bullish week. We expect a quiet session as focus shifts to the bond auction. FGN Eurobond Market The FGN Eurobond market kicked off on bearish sentiments on the back of fears of recession. The oilers such as Nigeria and Angola led the underperformers. Data from the United States showed the ISM Services PMI at 51.4 vs 51 expected and 48.8 prev. However, we saw a rebound as investors believed the market to be oversold and considered current prices attractive. Following the release of the weekly Initial Jobless claims data which came in at 233K vs. 241k estimated and 250K previous, buying sentiments persisted as recessionary fears reduced. We expect the bullish trend to persist. Currency Market The value of the Naira to the dollar depreciated by 0.36% to print at ₦1579.89/$ this week at the Nigerian Autonomous Foreign Exchange Market Window (NAFEM). Equities Market At the close of trading, a total of 348.95 million shares were exchanged across 7,677 deals, with a market value of ₦7.46 billion. This represents a notable improvement compared to the previous trading day, with a 29% increase in volume and a 112% rise in value at 348.95 million and 7.46 billion respectively. The market capitalization of the NGX now stands at ₦55.14 trillion. The NGX All-Share Index (ASI) edged down by 0.05 points to close at 97,100.31, reflecting a 1-week loss of 1.51%, a 4-week loss of 3.42%, but maintaining a year-to-date gain of 29.86%. Market breadth was as positive at 1.10x, with 23 gainers against 21 losers. OANDO led the gainers with 9.97% share price appreciation closing at NGN 35.85 per share, followed by RTBRISCOE (+9.68%), and OMATEK [RST] (+9.23%). On the losing side, LEARNAFRCA came out last with an end-of-day price depreciation of 9.97% at NGN 3.52 per share, followed by CADBURY (-9.95%) and NEIMETH (-9.17%). GTCO recorded the highest volume of 90.89 million traded shares, followed by OANDO (30.37m), and JAPAULGOLD (22.42m) |
