FCSL WEEKLY MARKET REPORT_ 15TH JANUARY,2021

Global Economy –Rundown:
The consumer price index for the United State for the month of December increased to 0.4%, this represents a 0.2 percentage point increase compared to the previous month inflation data. The increased inflation readings for the month are attributed to an 8.4% rise in gasoline prices that accounted for more than 60% of the increase in the CPI, also rebound in the prices of food propelled an increased CPI for the month, as this reported a 0.4% growth for the month. Based on monitored general price level within the economy, this has revealed rising prices of factory input and it outpaced the increase recorded on the prices of finished goods and services, while price trend in the services sector has been docile given the level of suppressed activity due to the pandemic. The country’s price level is anticipated to maintain a pent-up trend beyond the first half of 2021 that may pull inflation towards the Fed inflation target of 2% average.
Domestic Economy –Rundown:
The Nation inflation increased further to 15.75% in the month of December, which reflects a 0.86 percentage point increase compared to the previous month inflation figure of 14.89%. The consumer inflation rate in December was the highest since November 2017, when it stood at 15.90 percent. The current Inflation readings indicate that the country’s inflationary pressure momentum has been sustained for 16 successive months, which is driven by factors such as persistent output and productivity constraints, higher logistics and distribution costs that should be a cause of worry to Monetary authority, as it is still confronted with the economic woes of the pandemic. If the above trend is not addressed, citizens Consumption and Investment pattern will be impaired further.
Currency:
The Naira dipped in value at the I&E FX window to close at N394.67/USD, it also contracted at the parallel market to close at N475.00/USD.
Equities
The equities market week-on-week performance return bullish, as it recorded a 2.63% growth, as the ASI YTD grew to 2.25%. The sector performance of the NSE indices continued on a bullish run, as the average change of the NSE Indices was 6.64%, based on the indices monitored, which was propelled by a significant appreciation recorded from NSE industrial index.
Fixed Income:
The system liquidity for the week appreciated moderately, as both open buyback rate and overnight rates decreased to 0.50% and 1.00% respectively.
T-Bills secondary market activities returned bearish as the average yield inched up marginally by 7bps to 0.49% for the week, as yield across the medium-term and long-term expanded. The primary auction of T-Bills for the week yield inched up across all maturity bandwidth, as the clearing rates were 0.5%_91days, 1%_182days, and 1.5%_364days.
The Bond secondary market activities remained bearish, as the average yield for the week firmed up by 44bps to 7.67%, as yield appreciated across the medium-term spectrum.

 
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