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Breakfast Report - 27 February 2023

• In 2022, Nigeria’s real output expanded by 3.10% y/y, slightly lower than the 3.40% y/y growth in 2021. This economic growth was due to faster expansion in services, slower agricultural growth, and a deeper contraction in industrials. ICT, Trade, and Finance contributed the most to GDP growth in 2022 on a sector level. In Q1'23, we believe GDP growth could slow due to the recent crash crunch, persistent fuel scarcity, and the election-induced slowdown in economic activity.

 

• Equity: Investors bought up stocks across board, as all sectors closed Friday in the green. We anticipate a mixed session to start the week, while we expect election results to determine investor sentiment.

 

• Fixed Income: We expect the bonds market to open the week on a bullish note post-election, as investors seek to re-invest FAAC inflows. Meanwhile, the NTB segment is expected to trade in a similar manner, as investors continue to react to last Wednesday’s auction results.

 

 

• Commodities: The prices of various commodities on the AFEX Commodities Exchange showed a mixed performance this week. Maize, soybean, paddy rice, and sorghum experienced price declines of -1.53%, -0.94%, -1.15%, and -16.33%, respectively. In contrast, cocoa, and cashew saw price increases of 0.07% and 16.01%. Meanwhile, other commodities remained stable. The AFEX Commodity Index (ACI) increased by 2.98% w/w. Meanwhile, the AFEX Export Index (AEI) saw a w/w decline of -1.56%. On a year-to-date basis, the ACI has gained 3.42%, while the AEI has lost -5.93%.