The Week Ahead

Upcoming Events and NBS Economic Data Releases for the Week Ahead

The coming week is anticipated to be eventful as the National Bureau of Statistics (NBS) calendar shows. Here are some of the events in chronological order:

Monday 17th May 2021: CPI and Inflation report for the month of April 2021.
Tuesday 18th May 2021: Automotive Gas Oil (Diesel) Price Watch for the month of April 2021 & Liquefied Petroleum Gas (Cooking Gas) Price Watch for the month of April 2021.
Thursday 20th May 2021: (BusinessDay) Excellence in Public Service Awards. (NBS) Federation Account Allocation Committee (FAAC) April 2021 Disbursement, Nigerian Domestic and Foreign Debt (Q1, 2021), Selected Food Prices for the month of April 2021 & Transport Fare Watch for the month of April 2021.
Friday 21st May 2021: Daily Energy Generated and Sent out for the First Quarter of 2021 (Q1, 2021).

Oil Prices Maintain 3 Weeks Bullish Run Over Growing Global Demand

Recent economic data coming from the world’s largest economy postulate energy demand is expected to gain strong momentum relatively, commencing this coming week with restrictions easing in many key economic hubs and social mobility gathering pace.

President Joe Biden had also announced that vaccinated Americans can ditch their face masks, thereby boosting the morale of its citizens that the worst is over.

It is important to note that oil bulls are on their third-week winning streak with recent reports from the International Energy Agency revealing the global glut that built up in 2020 has been cleared.

The agency had earlier lowered its energy demand expectations over the recent spike in COVID-19 cases in India, the world’s third-largest importer of crude oil.

Oil prices ended their last trading session of the week on a bullish note with growing price optimism on global energy demand picking up as the world’s largest economy recorded relative drawdowns in oil stockpiles with the recent hacking of Colonial Pipeline, an incident that disrupted oil supplies.

At the end of Friday’s trading session, the British-based oil contract, Brent crude futures recorded gains of over 2% to settle at $68.83, with the West Texas Intermediate futures settling at $65.51 a barrel after posting gains of about 2.65%.

Read Also: Inflation to hit 18.7% in April on insecurity, dollar shortage

In addition, recent price actions reveal, oil bulls now hold the ace as the greenback posted losses after the U.S. Federal Reserve officials stated there would be no imminent need to tighten monetary policy despite rising inflation.

Considering that the black viscous hydrocarbon is priced in dollars, a weaker dollar makes the commodity cheaper for holders of other currencies, potentially triggering more buying pressures.


In the coming week, oil prices are expected to be little changed as India’s coronavirus situation lingers and fuel supplies in the U.S. return this weekend after a cyber-attack forced a shutdown at the nation’s main fuel pipeline.

Agriculture and Precious Metals Outlook

Gold prices are expected to be mixed in the coming week, as the U.S. dollar, Treasury yields, and rising inflation expectations are likely to weigh on the precious metal. The previous week saw Gold appreciate by 0.20% while Silver also declined by -0.36% Week on Week (W-o-W)

Cocoa prices will decline next week on weak demand from Europe and production surplus in Ghana and Ivory Coast.

Sugar prices are expected to rise next week due to supply tightness as India, a top producer of the commodity battles new Covid cases. Corn prices are expected to rebound from a two-week low hit earlier in the session on technical support.

Cocoa prices gained by 1.77% last week, Corn prices on the other hand depreciated by -9.35% Week on Week (W-o-W) while Sugar also dipped by -2.87%.

More of the Same for the Naira

Overall, it was a mixed market for the Naira both at the official window and BDC window.

On a W-o-W basis, the Naira remained flat against the dollar at the BDC window, however, against the Euro it was bullish while against the Pound it was slightly bearish.

At the I & E FX window, the Naira was depreciated marginally by -0.33% at the end of the week. The Naira closed the week at $/N411.67 at the I&E FX window, at the NAFEX (spot market) it closed at $/N410.48.

More of the same is expected in the week ahead as the Naira is anticipated to continue to hover around N406/$1-N412/$1 threshold.

FGN Bond and Eurobond Market Outlook

Market sentiment is expected to remain soft in the absence of any trigger in the week ahead.

The Bond market started the previous week on a relatively quiet note with mixed sentiment seen across the board as the cherry-picking was sustained on the long end of the curve.

At the close of the week, the market was slightly bearish with selling interest seen majorly across the board. The overall average benchmark yields closed at 9.10% for the week which increased W-o-W by +0.08%.

Activity in the Eurobond market picked up at the beginning of the previous week as global commodity prices continued to rally.

Demand was seen on the mid to long tenor paper. However, this trend wasn’t sustained as feared that rising inflation could push the Federal Reserve to tighten monetary policy faster than expected.

The average benchmark yield closed at 6.12% at the end of the week declining marginally W-o-W by -0.31%.

Treasury Bills Market Outlook

Activity in the treasury bills market to remain subdued in the coming week as system liquidity remains relatively tight.

The overall trading activity for the Nigerian Treasury Bills for the most part was bearish last week. At the close of the week, the average benchmark yield for T-bills rose by +4.23% to close at 5.07% while OMO bills rose by +2.77% W-o-W to close at 8.62%. Yield for CBN’s Special bills significantly rose by +15.31% W-o-W to close at 7.53%.

Money Market Outlook

Funding rates in the market are expected to remain elevated in the coming week.

System liquidity opened the previous week in a deficit of N71bn easing funding rates at the beginning of the week which was not sustained throughout the week.

Funding rates rose significantly at the close of the week. Open Buyback (OBB) closed at 26.88% while Overnight (O/N) rates closed at 28.88% indicating a Week-on-Week (W-o-W) rise of +82.24% for OBB and +89.38% for O/N rates.

Nigerian Capital Market Outlook

In the coming week, we expect a likelihood of choppy trading sessions during the week as investors take profit on this week’s gains.

However, press releases from listed companies and macroeconomic developments is likely to impact investors’ decisions.

The Nigerian bourse closed the week positive with an advancement of +0.72%. The Nigerian Stock Exchange gained N147.57bn in Market capitalization W-o-W while YTD return and market capitalization currently stand at -1.96% and N20.58trn respectively.

The volume and value of stocks traded on the exchange last week declined by -0.08% and -0.01% respectively.

Performance across sectors tracked was broadly positive last week as the NSE Insurance was the highest gainer for the week with +3.97% while NSE Banking, NSE-30, NSE-INDIA, NSE Consumer Goods and NSE Oil and Gas closed the week positive with +3.72%, +0.86%, +0.78%, +0.32% and +0.10% respectively.

In addition, Businessday analysts expect investors to monitor the movement of yields in the fixed income market.

The Nigerian Economy in Retrospect

The Transmission Company of Nigeria stated that at about 11.01 am, 12th of May 2021, there was a total system collapse of the grid, because of voltage collapse at some parts of the grid.

TCN commenced grid recovery immediately after the collapse, from Shiroro Generating Station to Katampe TS, Abuja through the Shiroro – Katampe line at 11:29 am, and through Delta Generating Station to Benin Transmission Substation and reached Osogbo and parts of Lagos. While the grid restoration and power restoration gradually progressed to other parts of the country.

According to the World Bank report titled ‘Defying predictions, remittance flows remain strong during COVID-19 crisis’, remittances by Nigerians in the diaspora declined by -27.7% in 2020.

The report noted that remittances to Sub-Saharan Africa declined by an estimated -12.5% due to a decline in the remittance to Nigeria that contributes the largest amount in the region.

It noted that excluding flows to Nigeria, remittances to Sub-Saharan Africa increased by +2.3%.

According to the NBS Data on Company Income Tax breakdown by sectors for Q1 2021, the sum of N392.77bn was generated as CIT as against N295.72bn generated in Q4 2020 and N295.68bn generated in Q1 2020 representing a +32.82% increase Quarter on Quarter (Q-o-Q) and +32.84% increase Year on Year (Y-o-Y).

Breweries, Bottling and Beverages generated the highest amount of CIT with N23.26bn generated and closely followed by Professional Services including Telecoms which generated N18.17bn, State Ministries & Parastatals generated N17.35bn while Textile and Garment Industry generated the least and closely followed by Mining and Automobiles and Assemblies with N13.94m, N34.4m and N73.57m generated, respectively.

Out of the total amount generated in Q1 2021, N152.33bn was generated as CIT locally while N184.59bn was generated as foreign CIT payment. The balance of N55.85bn was generated as CIT from other payments.

The Nigeria Sovereign Investment Authority, manager of Nigeria’s sovereign wealth fund, announced its audited results for the 2020 financial year, which indicated a +343% growth in income to N160bn in 2020 from N36.25bn in 2019. It noted that excluding devaluation gain of N51bn, it made a core income of N109bn compared to N33.07bn in 2019.

According to NSIA “Despite the challenges of COVID-19, it had a strong year owing to strong performance from its investments in international capital markets, improved contribution from subsidiaries and affiliates and exchange gain from foreign currency positions”.

Furthermore, it noted that it achieved a +33% growth in net assets to N772.75bn in 2020 from N579.54bn in 2019 and stated that it received an additional contribution of $250m and provided stabilization support to the Federal Government of $150m withdrawn from Stabilization Fund.

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