EUR 132.56 For Business Accounts Only

Breakfast Report - 15 August 2016

• Speculations around potential producer action to support the oversupplied oil market has propped oil prices by over 10% mtd this morning (after recording an 18% decline in July). According to media, supply talks are currently being held by major oil producing nations, Saudi Arabia and Russia. This comes after recent reports showing that Saudi Arabia’s oil production surged to an all-time high 10.67 mbpd in July 2016 and weekly U.S domestic inventories of crude oil and refined products rose to 1.39 billion barrels. International Brent crude oil futures are currently trading at $47.10/bb.
• The Federal Government of Nigeria disclosed plans to further disburse ₦100 billion for capital projects in the coming days in addition to the ₦322 billion released so far. The Government also reiterated its pledge to keep capital budget spending to a minimum of 30% of total budget spending. The Government would have to ramp up spending in the coming months to meet this target as the economy is desperately in need of stimulus.
• Meanwhile, the Debt Management’s Office (DMO) has invited bids from international banks and local lenders for the sale of the first tranche of its $4.5 billion Global Medium-Term Notes Issuance Programme. This is expected to enable Nigeria have the flexibility of quickly taking advantage of favourable market conditions in the International market if and only when the need arises.
• The Nigerian equity market traded largely in negative territory this past week, clinching just one green close Wednesday as market participants maintained a risk off mode. Notably, the market lost 65bps for the week to put year to date loss at 4.87%.

• Whilst we note the recovery of some key sectors from their loss positions, we expect the market to continue its topsy-turvy pattern in the week ahead.