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Breakfast Report - 20 March 2023

According to National Bureau of Statistics, headline inflation in February reached an 18-year high of 21.9% y/y (Jan: 21.82% y/y), propelled by prolonged fuel and cash shortages. However, stable exchange rates provided some relief to the monthly headline index, which decelerated 16 bps to 1.71% m/m. Because of the high base from the previous year and the absence of new shocks, we expect inflation to moderate in March.

Equity: We still expect mixed trading in the market this week, as investors cautiously cherry pick stocks in the equity market, while the decision of the MPC will also be keenly anticipated.

Fixed Income: We expect to see a muted session at the start of the week, as investor focus shifts to the MPC meeting during the week.

Commodities: Last week on the AFEX Commodities Exchange, maize, soybean, sorghum, and cashew prices fell by -2.30%, -1.49%, -6.83%, and -0.49%, respectively. Paddy rice, cocoa, and ginger prices increased by 0.66%, 0.11%, and 5.75%, respectively. Other commodities remained unchanged. Year-to-date, maize, soybean, paddy rice, sesame, and cashew have returned 14.61%, 11.21%, 7.37%, 25.30%, and 9.07%, respectively, while sorghum, cocoa, and ginger have returned -12.74%, -1.29%, and -16.04%, respectively.