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Breakfast Report - 16 January 2023

• According to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), crude oil production (excluding condensates) reached a 9-month high of 1.23 million bpd in December 2022. This represents a 4.2% m/m increase over November 2022 output, but it still falls short of OPEC's 1.8 million bpd allocation. The increase in output in December was primarily due to a rise in oil production across the key terminals. Because of Tompolo's warfare on oil theft, oil output has been steadily increasing over the last three months. Although Nigeria missed out on big gains when oil prices were above $100 per barrel, continued output growth could boost crude export earnings (the country's main source of foreign exchange), and relieve pressure on the Naira.
• Equity: Last week, positive sentiment was seen across board, as all sectoral indices except the insurance closed in the green. Also, last week returned 252bps compared to the 6bps loss in previous week, and we are likely to see moderations this week, as investors begin to take profit.
• Fixed Income: This week, we expect the NTB market to trade in line with system liquidity, while the bonds market should trade on a quiet note ahead of the release of the Q1 bond issuance calendar.

 

• Commodities: Prices of Commodities on the AFEX Commodities Exchange returned mixed results. Soybean increased by 8.44%, Cocoa by 0.37%, and Paddy Rice by 1.97%, while Maize declined by -8.71%, Cashew by -6.26% and Sorghum by -2.24%. The price of other commodities remained unchanged. Year-to-date, Paddy Rice, Soybean, and maize remained positive at 2.79%, 12.70%, and 6.06% respectively, while Sorghum, Cocoa and Cashew returned negative at -4.92%, -3.85% and -15.57% respectively.