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Breakfast Report - 09 May 2022

Recently, the Federal Government reopened four additional land borders -Idiroko (Ogun), Jibiya (Kastina), Kamba (Kebbi), and Ikom (Cross Rivers) borders. This reopening is happening two years after the reopening of the Seme (Lagos), Maigatari (Jigawa), Illela (Sokoto), and Mfum (Cross River) borders just before the take-off of the Africa Continental Free Trade Area (AfCFTA). While the land borders were closed to prevent the smuggling of weapons and support the local cultivation of food, the prices of food items have risen nonetheless as supply fails to keep up with demand. In the near term, we expect the reopening of the borders to support volatile food supply from food-producing states, boost intra-African trade and culminate to lower inflation outcomes.

Equity: The Bulls continue to dominate the market, amid strong Q1 financial performances and positive investor sentiment. We expect the green closes to persist at the start of the week, although we do anticipate some profit-taking on last week’s strong performers.

Fixed Income: In the absence of market catalysts in the coming week, we expect current sentiment to persist in the bonds space, while anticipating muted activity in the NTB segment ahead of the PMA.