This is a brief summary of the economic events that occurred this week in the global and domestic space. This report also provides investment strategies for investors in the coming week.
Earlier this week, the US Bureau of Labor Statistics released its Jobs report for July 2023, noting that the US added fewer jobs than the previous period. The US nonfarm payroll rose by 187,000 in July 2023, marginally higher than the 185,000 recorded in June 2023. The unemployment rate also changed marginally by 10bps to 3.50% in July 2023. Another key labor statistic, labor participation rate remained constant for the fifth consecutive month at 62.60%. However, looking at the data holistically, most indicators point to a slower growth in the US economy, following the recent 25bps rate hike by the US Federal Reserve in July 2023.
Earlier this week, the Nigerian Electricity Regulatory Commission (NERC) released the electricity report for Q1:2023. The report showed that electricity Distribution Companies (DisCos) in Nigeria collected revenue amounting to NGN247.09bn in Q1:2023. This marks a decline of 458bps to 73.33% vs (68.75% in 2022FY). The decrease in collection efficiency raises concerns about the financial health of the DisCos and highlights the need for effective measures to improve revenue collection and ensure the sustainability of the energy sector in Nigeria.
Equities and Stock Recommendation
The Nigerian Equities Market closed the week on a bullish note as the NGX All Share Index gained 22bps WoW to 65,198.08 points. The market gained in only two (2) out of the five (5) trading days in the week. Consequently, the year-to-date returns printed at 27.21% (last week’s print: 26.94%). This week, the Banking (-2.13%) and Oil and Gas (-0.68%) sectors closed in the red while Industrial Goods (+0.23%), Consumer Goods (+2.27%) and Insurance (+5.88%) sectors closed bullish. This week, the top gainers include SUNUASSUR (+75.5% to NGN0.93), SKYAVN (+73.8% to NGN28.15) and NASCON (+41.4% to NGN41.00). On the flipside, the top losers for the week were JOHNHOLT (-45.8% to NGN1.47), OMATEK (-33.3% to NGN0.34) and ETERNA (-27.2% to NGN21.10). In the coming week, we expect investors to stay long on stocks with attractive dividend payments, following the release of earnings reports.
The Nigerian Treasury Bills market ended the week bullish as average yield declined by 16bps to WoW to settle at 6.96%. However, the secondary bond market ended the week bearish as average yield surged 18bps WoW to settle at 13.31%. This is following selloffs in the JAN-2026 (+46bps) and MAR-2050 (+9bps) instruments.
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