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Breakfast Report - 03 January 2023

In the final week of the year, we witnessed higher foreign exchange reserves. This represents the first organic accretion to reserves since the inflow of Eurobond proceeds in H1'22. We attribute this increase to higher oil production and year-end remittances. According to the NNPC, oil production cleared 1.6 mb/d in December. While we expect slight depreciation in the I&E window, improved intervention could stabilize the parallel market rate in the near term.

Equity: With the year closing on a positive note, we anticipate more positive activity to start the new year, as investors take positions ahead of year-end results. However, we do not rule out further profit taking in the banking sector in the first few sessions of the new year.

Fixed Income: We anticipate a quiet start to the new trading week as investors await the release of the Q1’23 bond calendar.

Commodities: Prices of Commodities on the AFEX Commodities Exchange returned mixed results. Maize increased by 9.69%, Cocoa by 1.72%, and Paddy Rice by 4.60%, while Soybeans declined by -0.59%, and Cashew by -10.06%. The price of other commodities remained unchanged. Year-to-date, Paddy Rice, Sorghum, Cocoa, Ginger, and Sesame remained positive at 45.85%, 46.95%, 33.87%, 0.67%, and 14.99%, respectively, while Maize, Soybeans and Cashew returned negative at -5.44%, -22.15% and -8.35% respectively.