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Breakfast Report - 20 December 2021
- According to the National Bureau of Statistics, headline inflation fell to 15.40% y/y in November, 59bps lower than the previous month, owing primarily to the high base effect reinforced by the retention of fuel subsidies. While food inflation decreased to 17.21% y/y, induced by a high base and the harvest season, frontloading ahead of the festive season prompted a surge in m/m inflation. On the other hand, core inflation accelerated by 61bps to 13.85% y/y. While we see the recommendations of the World Bank - fuel subsidy removal and taxes on soft & alcoholic drinks - tilting pricing risks to the upside, we see electioneering subduing these risks as the economy enters a pre-election year.
- Equity: The market was able to recover from the bearish sentiment after DANGCEM reverted to ₦255 price level on Friday. We still expect market to trade mixed to start the week, amid minimal activity levels
- Fixed Income: In today’s session, we expect the current weak sentiment to persist in all three segments of the secondary market, as investors remain focused on the ongoing FGN Sukuk issuance.
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