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Breakfast Report - 31 May 2021

The Week Ahead
Nigeria’s recovery path from the pandemic-induced recession was confirmed this week, as GDP grew by 0.51% y/y in the first quarter of 2021. Due to OPEC production limits, the quarterly recovery in oil production was not sufficient to avoid a contraction in the oil sector. As a result, the recovery can be attributed to the continued expansion in the non-oil sector, specifically, the Information and Communications, Agriculture, Manufacturing, Real estate, and Construction sectors. Going into Q2’21, we anticipate an unusual rebound in economic activities supported by favorable base effects, zero likelihood of lockdowns, definite but albeit slower growth in the ICT sector slightly smeared by a minor contraction in the oil sector.
Equity: Following a significant climb back in some specific names at the end of last week as well as a jump in value traded, we expect this week’s trading to kick off on a similar note.
Fixed Income: We expect the market to continue to trade in a similar pattern, given the relatively healthy level of liquidity. In the bonds and OMO spaces, we foresee another round of buyside activity, as investors continue to react to stop rates at the last auction. Meanwhile we expect the NTB segment to continue to trade quietly in the absence of market catalysts.