The Nigerian Markets report for the week ended January 8, 2020. It captures indexes that gauge performance across a number of financial markets in and outside the country as well as key economic indicators that give a glimpse into the state of the Nigerian economy.
Nigerian stocks ended the last trading session of the week on a bearish note with the benchmark index of the Nigerian Stock Exchange and Market Capitalization falling marginally at the close of the week. However, all other indices finished higher with the exception of NSE Premium, NSE Lotus II, and NSE Industrial Goods while the NSE ASeM and NSE Growth Indices closed flat.
The exchange rate between the naira and the U.S. dollar for last week (as of Friday, January 8, 2021), closed at ₦472/$1 in the parallel market according to AbokiFX. Meanwhile, the rate at the NAFEX or Importers & Exporters Window fell back to ₦393.50/$1, having surged to ₦410/$1 in what stoked speculations that the Central Bank had devalued the naira.
The flagship cryptocurrency Bitcoin continued its stellar run, hitting a new all-time high of more than $41,000 on Friday morning. The cryptocurrency was up as much as 10.4%, to $41,793.73, having first breached $40,000 on Thursday, per Markets Insider. The rally has been driven by the huge amounts of money being pumped into economies by governments and central banks amid the coronavirus crisis.
Oil prices are on a solid rally. Brent topped $55 per barrel at the end of the week buoyed by the pledge from Saudi Arabia to cut production deeper, the prospects of deeper fiscal stimulus amid the second wave of the Covid-19 pandemic, and vaccine optimism.
Gold spot prices closed at $1,849, printing losses of 3.39% at its last trading session on the back of the recent surge in the U.S. Dollar Index and Bitcoin stealing some of the global investors’ buying interest that would have in the past been directed to gold and other precious metals.
- Recession – The Nigerian economy is in a recession after GDP contracted for the second consecutive quarter: -3.62% in Q3 after -6.10% in Q2 2020, per data from the National Bureau of Statistics.
- Inflation – Nigeria’s annual inflation rate is currently estimated to be at 14.89% (for November 2020).
- Manufacturing –The Central Bank of Nigeria composite Purchasing Managers’ Index for the manufacturing sector fell to 49.6 points in December from 50.2 in November. That indicates a contraction, below the 50 benchmark.
- Monetary Rates – as of the last CBN Monetary Policy Committee in November: Monetary Policy Rate at 11.5%; Cash Reserve Ratio at 27.5%; Asymmetric corridor of +100/-700 basis points around the MPR; Liquidity Ratio at 30%.