The Nigerian Markets report for the week ended November 20, 2020.
Stock Market
After recording a historic surge the previous week, the Nigerian Stock Exchange (NSE) All-Share Index and Market Capitalization depreciated by 2.57% to close last week at 34,136.82 and ₦17.838 trillion, from 35,037.46 and ₦18.308 trillion, respectively. Similarly, all other indices finished lower with the exception of the NSE Insurance Index which appreciated by 0.51% while the NSE ASeM Index closed flat.
NSE News: The members of the NSE voted overwhelmingly on Wednesday, at its 59th Annual General Meeting (AGM), a meeting which is expected to be its last as a mutual entity, to support the listing of the Nigerian Exchange Group Plc. (NGXG) on the Nigerian Exchange Limited (NGX) once the demutualization of the NSE is completed.
Exchange Rate(s)
- The exchange rate in the parallel or black market – where forex is traded unofficially – hit a record low to close at ₦484/$1 from ₦460/$1 the previous week, per data from AbokiFX.
- At the NAFEX window, the naira gained to close at ₦385/$1 from ₦386/$1 the previous week, according to FMDQ market data.
Commodities
- Crude Oil – International benchmarks West Texas Intermediate (WTI) and Brent Crude closed Friday at $41.78 and $44.45 from $40.37 and $42.98 the previous week, respectively. Optimism is growing around a Covid vaccine and the likelihood of OPEC extending its production cuts into next year with Fitch Ratings and Goldman Sachs predicting a rebound in 2021
- Gold – The metal was in the green 0.43% and at +$1,873.
- Cocoa – Cocoa prices soared to close at $1,740.
Cryptocurrencies
- Bitcoin (BTC) price made gains Friday, hitting new 2020 highs as much as $18,813, according to CoinDesk 20 data.
- Ethereum (ETH), the second-largest cryptocurrency by market capitalization, was up Friday, closing at $515.
- The total amount of cryptocurrency “locked” (TVL) in decentralized finance, or DeFi, passed $14 billion for the first time.
Economic Indicators
- Recession – The Nigerian economy slipped into a second recession in five years after contracting for the second consecutive quarter. GDP recorded negative growth of 3.62% in Q3 2020 after contracting 6.10% in the previous quarter, per data from the National Bureau of Statistics.
- Inflation – Nigeria’s annual inflation rate is currently estimated to be at 14.23% (for October 2020) according to data from the National Bureau of Statistics.
- Manufacturing –The Central Bank of Nigeria composite Purchasing Managers’ Index for the manufacturing sector rose to 50.2 in November from 49.4 in October. That indicates an expansion, above the 50 benchmark, after six consecutive months of contraction in factory activity.
- Monetary Rates – as of the last CBN Monetary Policy Committee in September: 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%.