FREE

Breakfast Report - 04 May 2022

Due to the impact of the Russian-Ukraine crisis on oil prices, the International Monetary Fund raised its outlook for Nigeria. The Fund raised its GDP growth forecast by 0.7 percentage points to 3.4%. On the flip side, the Fund expects inflation to average 16.1% in 2022 (previously: 13.25%). We believe the bearish estimate is linked to fuel shortages, food insecurity and exchange rate pressures. However, we see room for moderation in food inflation as the Federal Government reopens more land borders.                    

Equity: Coming in second after January’s 9.15% return, was this month’s 5.69% gain as market recovered from the 91bps loss posted in March, on the back of impressive Q1 results seen across board. Also, all sectors closed the month in the green. Speaking specifically to today’s performance, we saw another green close across sectors for the second consecutive session with decent gains in large cap names like AIRTLEAFRI, DANGCEM, and NESTLE propping up the market. Going into the new week, we are likely to see market trade mixed as investors take profit on some of the recent gainers.                     

Fixed Income: Investors will keep a keen eye on macroeconomic data to assess the health of the economy as the second quarter of the year continues. Meanwhile, a constrained liquidity profile for May, coupled with the Federal Government’s plan to increase borrowing next month and a rise in interest rates could spark increased activity in the market.