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MAW BUSINESS UPDATE

MAW BUSINESS UPDATE


 Nigeria’s  Manufacturing PMI Declines To 42.4


The May 2020 PMI survey conducted by the Statistics Department of the Central Bank of Nigeria, revealed that the manufacturing and non-manufacturing sectors of the economy contracted in May, although no data was provided for the month of April, data reflects the effect of the lockdown on the economy to curtail the spread of the virus.

The Manufacturing PMI declined from 51.1 in March to 42.4, indicating a contraction in the manufacturing sector, the lowest level since September 2016.
The composite PMI for the non-manufacturing sector stood at 25.3 in May, down from 49.2 in March, the lowest level since 2014. 


*Stock Market - YTD Performance -6.80%*
The NSE ASI depreciated during the week as profit-taking weighed on overall performance with a depreciation of 1.00% week-on-week. Bellwether stocks such as GUINNESS, UBN, STANBIC, etc. lost -8.50%, -8.21%, -7.26% respectively.

The NSE ASI and market capitalization now stand at 25,016.30bps and 13.050 trillion, respectively. This brought the year-to-date figure of the ASI down to -6.80% from -5.86% last week. The bearish performance recorded during the week was anchored by in the Industrial Sector which lost -3.14%.







FIXED INCOME
TREASURY BILLS
The Treasury Bills market started the week on a relatively quiet note with minimal activity witnessed across board on the back of the unattractive yields. The T-bills market ended the week bearish as average yields rose 101bps week-on-week to 3.2%.



BONDS

The Bond market started the week on a relatively quiet note as market participants traded with caution ahead of the MPC meeting. The market returned bullish on 2 of 3 trading sessions following improved liquidity, hence average yield declined 32bps week-on-week to 10.1%.




EUROBONDS

The Nigeria Eurobond market performance was bullish as average yields declined c.50bps to 7.7%. The 2021 and 2025 instruments saw the biggest weekly drop in yields declining 162bps and 121bps respectively. The Corporate Eurobonds that we track mirrored the Nigerian Eurobond market as average yields declined 105bps week-on-week to 7.6%.  





MARKET TREND

A market trend is a perceived tendency for financial markets to move in a certain direction over time. ‘A bull thrusts its horns up into the air, while a bear swipes its paws downward’ are metaphors for the movement of a market.

A bull market is the condition of a financial market in which prices are rising or are expected to rise, characterized by optimism, investor confidence and expectations that strong results should continue for an extended period.

Conversely, a bear market is when a market experiences prolonged price decline amid widespread pessimism and negative investor sentiment. Bear markets also may accompany general economic downturns such as a recession.

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