Global Economy –Rundown:
The United State Economy, dipped by 9.5% from the first quarter, at an annualised level of 32.9%, the second quarter economic contraction was propelled by slump that cut across business investment activities, residential investment, and household spending on services that witnessed an annualised decline of 27%, 38.7%, and 43.5% respectively. Economic data released in recent time by the country influenced the federal reserve decision to maintains its key benchmark rate near zero. while the United State has recorded some economic gains, as reported by the PMI, and if sustained along with the extended proposed stimulus package, the economic trajectory for the third quarter should reflect some economic recovery however at a slower pace, while the risk factor of this forecast will be the surging virus cases.
Domestic Economy –Rundown:
The Nation’s value-added Tax within the first half of the fiscal year rose by 8.45% to N 651.77Bn from N 600.98Bn realised same period for the previous year. On a sectorial demography, Professional Services was the highest contributing sector, next in line was the Other Manufacturing Sector, and Commercial & Trading that generated; N95.92Bn, N67.63Bn, and N31.10Bn respectively. According to the VAT collection component, the sum realised from Non-Import VAT locally was N335.82Bn, and Non-Import VAT foreign was N161.74Bn, while Nigeria Customs Service Import VAT accounted for the sum of N154.21Bn. The increased VAT collection despite reduced economic activities was because of increased Value Added Tax rate.
Currency:
The country’s currency during the week closed flat at the I&E, as the Naira remained unchanged from the previous week closing rate of N389.25/USD, The Naira contracted at the parallel market, as the Naira dipped by –0.64% on a w/w basis. The market still depicts pressured dollar demand.
Equities
The equities bourse for the week was on a bullish rally as the week-on-week performance indicated a 1.09%, while the YTD ASI growth was a negative growth of -8.00%. The sector performance of the NSE indices, we monitor was bearish for the week, as the average change of the NSE Indices was -0.29%.
Fixed Income:
The overnight rate and open buyback dipped respectively by 10bps and 20bps to 2.10% and 1.40% for the week.
At the T-bills primary auction for the week the total sum sold across the maturity structure was N265.956Bn at the respective clearing rate of 1.20%- 91days, 1.50%-182days, and 3.40%- 364days.
READ MORE: FCSL WEEKLY REPORT