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Breakfast Report - 15 August 2022

According to the Organization of Petroleum Exporting Countries (OPEC) monthly report, Nigeria’s crude oil production (excluding condensates) averaged 1.08 million bpd in July. This represents a 74,000 bpd decrease from June'22 output and is far below OPEC's allocated production quota of 1.8 million bpd. Since the beginning of the year, Nigeria’s oil production has been on a downward slope. Oil production through the Trans-Forcados terminal, the country's largest oil production facility, has decreased by 49% YTD. We attribute the overall decline to pipeline vandalism and crude theft. Nigeria has not fully capitalized on the benefits of the elevated oil prices that have persisted throughout the year due to low output levels. As a result, the apex bank had to resort to non-oil export-enabling policies to curb volatility in FX inflows.

Equity: Market closed down last week as declines in large cap names like MTNN, BUACEMENT and DANGCEM dragged the All-Share index lower. We expect the market to pick up from Friday’s close amid slight recoveries in some of the week’s losers.

Fixed Income: To start the week, we anticipate a tepid session in the bonds space, as the bond auction takes center stage. Meanwhile, we expect bearish sentiment to persist in the NTB segment as the rate uptick at the last auction continues to dictate sentiment.