FCSL WEEKLY MARKET REPORT 19TH MARCH 2021

Global Economy –Rundown:
The International Monetary Fund has reechoed about the increasing rate of divergence between developed and emerging economies as the Fund estimate that about 90 million persons globally would have fallen below the extreme poverty threshold since the outbreak of the pandemic. The Fund projected that the aggregate income per capita for both emerging and advanced economy will be 22% lower than it would have been without the pandemic, given that some countries with stiffened financial conditions of indebtedness have reduced spending capacity as such this reduces their ability to mitigate the economic woes of the pandemic. However, based on the recent turns of event that suggests possible withdrawal of monetary stimulus given improving economic upbeats as indicated by increasing bond yields. Although most Apex Bank still remained dovish towards interest rate direction, this has propelled the Fund to affirm its stand that global economic trajectory remained uncertain as vaccines remained unevenly distributed across emerging and advanced economies.
Domestic Economy –Rundown:
The consumer price index for the month of February maintained the elevated stand that has persisted for the 18th consecutive month as the inflation readings for the month of February appreciated to 17.33% from 16.47%, representing a 5% increase and other components of the index also trailed the path of increased price level as the food index for the month increased to 21.79% from 20.57%, this rise was driven by intensified prices of bread, cereals, potatoes, fruits, and fats, likewise, for the core Inflation that rose by 4.47% to 12.38%. The increased price level was induced by price increases across air transport, medical services, and pharmaceutical products. The persistent rise in price level signals a hyperinflation regime for the country as the surge in the general price level of the country are not growth indue and if not controlled then the Nation’s future may be stiffened.
Currency:
The Naira closed flat at the I&E FX window to settled at N410.00/USD same with the parallel market, where it closed at N485.00/USD.
Equities
The equities market consecutive bearish sentiment was maintained as the market weekly performance indicated a (0.69%) contraction and the YTD ASI growth contracted further to (4.69%). The weekly average sector performance of the NSE indices declined to 0.08%, which was driven by a 2.52% reduction in the NSE Industrial index.
Fixed Income:
The open buyback rate and overnight rates declined to 12.50% and 12.75% respectively on the strength of system liquidity.
T-Bills secondary market activities remained bearish as the average yield appreciated by 71bps to 3.23%, as most yield trended upward. At the T-bills auction for the week yields for both short- Medium term maturity remained flat at 2.00% and 3.00% respectively, while yield for long tenured Bills inched to 7.00%.
The Bond secondary market closed bearish, as the average yield for the week rose by 16bps to 10.40%, yield movement around the short and medium tenured bond both trended upward.
 

 
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