Market Update

 News Spotlight

Inflation Rises to a 25-Month High of 12.4%

The Consumer Price Index report showed that headline inflation rose to a 25-month high of 12.40% Year-on-Year in May 2020, from 12.34% in the prior month.

The headline inflation increased by 1.17% Month-on-Month; this is 0.15% higher than the rate of 1.02% recorded in the previous month. The yearly average rose to 11.79% this current month, this is 0.08% greater than 11.71% recorded in the previous month.

Notably, core inflation rose faster by 14bps to 10.12% Year-on-Year from 10.0% in April 2020, the highest since July 2018. However, core inflation increased 5bps slower at 0.9% on the Month-on-Month basis, the first moderation since February 2020. Meanwhile, food inflation was little changed at 15.04% Year-on-Year from 15.03% in the previous month.

Stock Market - YTD Performance -7.51% 

The NSE ASI depreciated during the week, as it recorded a bearish performance due to losses in 4 of 5 trading sessions, as it plunged 1.4% week-on-week.

Bellwether stocks such as SEPLAT, NB, ETI, DANGCEM, etc. lost -9.99%, -9.52%, -8.26%, and -6.47% respectively. The NSE ASI and market capitalization now stand at 24,826.75bps and N12.95 trillion, respectively.

This brought the year-to-date figure of the ASI to -7.51% from -6.18% last week. The bearish performance recorded during the week was anchored by the Oil & Gas index which lost -4.9%.

Fixed Income

Treasury Bills

The Treasury Bills market performance was bullish as average yield across benchmark tenors trended lower, down 93bps w/w to close at 2.3%.

The PMA result was relatively strong with a bid to cover ratio of 6.2x and stop rates printing at 1.80%, 2.04% and 3.746% on the 91-Day, 182-Day and 364-day maturities, respectively.

Bonds

The domestic bond market maintained its bullish momentum, recording an average decline of 69bps in yields to close the week at 9.34%. The DMO conducted a bond auction this week, offering a total of ₦150.0bn across the 3-year, 15-year, and 30-year instruments.

Overall, the auction was oversubscribed with a bid to cover ratio of 3.6x. The longer-dated instrument recorded the most subscription with a bid to cover ratio of 4.7x. The short and mid-dated bond instruments also recorded a strong bid to cover ratios of 3.4x and 2.5x, respectively.

The DMO allotted a total of ₦100.0bn across the short-dated (₦32.99bn), midterm (₦16.22bn) and long-dated (₦50.79bn) instruments. Meanwhile, stop rates printed at 8.00%, 11.00%, and 12.15% for the short, mid, and long-term instruments.

Eurobonds

The Nigeria Eurobond market finished on a slightly bearish note week on week as average yield rose 2bps to settle at 7.26% from 7.24% last week  

Price-to-Earnings Ratio (P/E Ratio)

This is the ratio for valuing a company that measures its current share price relative to its earnings per share. The price-to-earnings ratio is also sometimes known as the price multiple or the earnings multiple.

This ratio is used to determine the relative value of a company’s shares. It can also be used to compare a company against historical records or to compare aggregate markets against one another or over time.