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Weekly Commentary and Stock Recommendation: 3rd October – 6th October 2023

By October 6, 2023October 8th, 2023Weekly Market Update
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Global Economy

Earlier this week, according to Eurostat, Eurozone retail sales in the 20 countries sharing the Euro fell 1.2% MoM in August 2023 (vs. -0.1% MoM in July 2023). In August 2023, the calendar adjusted retail sales index decreased by 2.1% YoY in the euro area. The monthly fall was caused mainly by a sharp drop in mail orders and shopping on the internet which fell 4.5% and a drop in the sale of petrol, down 3.0%. YoY. The decline in sales of fuel was even more pronounced at 7.7% and there was a 3.2% fall in the sales of food drinks and tobacco. Elsewhere, the US Bureau of Labor Statistics released its monthly jobs report. According to the report, total nonfarm payroll employment rose by 336,000 in September, above the average monthly gain of 267,000 over the prior 12 months and the unemployment rate was unchanged at 3.8% MoM.
Domestic Economy

During the week, the Minister of Budget and Economic Planning, unveiled the Federal government’s objectives for 2030, which include raising the country’s GDP per capita to USD6,000 and decreasing unemployment to 0.6%. Presently, Nigeria’s GDP per capita is at USD2,184, and the unemployment rate has recently declined to 4.1%, according to the latest report. Furthermore, the Minister also outlined plans to reduce the poverty rate to 0.6% and guide the nation toward achieving middle-income status. he shared these aspirations during a press briefing in preparation for the Nigeria Economic Summit scheduled for October 23 to 24, 2023. on the other news The Debt Management Office (DMO), has initiated the process of accepting subscriptions for a 10-year Ijarah Sukuk with an annual interest rate of 15.75%. This Sukuk is set to mature in October 2033. This announcement was officially made by the DMO today, and the subscription window is scheduled to remain open for 9 days, running from October 3rd to October 11th, with the settlement date set for October 13th. The Sukuk in question will have a ten-year duration, with interest payments made semi-annually, concluding in October 2033.

Equities and stock recommendation

This week, the Equities market closed bullish as the NGX All Share Index (ASI) gained 11bps WoW to 66,454.57 points. As a result, the year-to-date returns rose to 29.66% (vs 29.52% last week). On a sectoral basis, the Consumer Goods (+0.17% WoW) and Banking (+1.43% WoW) sectors closed positive while the Industrial (-1.38% WoW) and Insurance (-3.11% WoW) sectors closed negative. However, the Oil and Gas sector closed flat. Top gainers for the week include FTNCOCOA (+19.2% WoW to NGN1.80), RTBRISCOE (+16.3% WoW to NGN0.57) and OANDO (+9.00% WoW to NGN9.00). Whereas CHIPLC (-19.0% WoW to NGN1.02), ABCTRANS (-17.7% WoW to NGN0.65) and CHAMPION (-9.9% WoW to NGN3.38) led the losers’ chart. In the coming week, we expect mixed sentiments in the market as investors engage in profit-taking activities.

Fixed Income

The Treasury Bills market closed the week on a bearish note as average yield went up by 6bps WoW to settle at 8.00%. However, the secondary bond market ended the week bullish as average yield fell by 3bps WoW to settle at 14.41%. This is following buying interest in the MAR-2024(-99bps) instrument. Overall, the Naira Fixed income market closed the week bearish as average yield increased by 2bps WoW to settle at 11.21%.
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