FG to resume conditional cash transfer in the week ahead
The Federal Government disclosed that it will resume the conditional cash transfer to beneficiaries across the country from the 23rd of August.
Read also: FG to restart cash transfer payment to beneficiaries Aug. 23
This was disclosed in a statement by the National Coordinator of the programme, Hajiya Halima Shehu, National Cash Transfer Office (NCTO) under the Federal Ministry of Humanitarian Affairs at a meeting with State Focal Persons of the National Social Investment Programme in Abuja on Friday.
She disclosed that the delay in resumption is due to a system upgrade being carried out by the FG, to boost efficient service delivery. Upgrades including “tweaking the payment modalities to respond to cashless realities, security concerns and digitization of the payment processes.”
“Thirty per cent of its operations have been digitalized and will recommence payment to its beneficiaries next week,” she added.
She also signalled that not all states would start receiving cash transfers from the 23rd of August due to other operational bottlenecks, and urged for understanding with stakeholders, citing that the FG is committed to lifting 100 million Nigerians out of poverty.
Gold posts gains but still trades below the $1800 threshold
The yellow metal closed the week with a 1% gain, after a flash crash earlier in the week, that caused the asset class to trade below the $1,700 levels in the Asian session on Monday.
Gold had a rollercoaster ride this week which many see as a comeback. the benchmark gold futures contract declined to $1,677.90 after closing the previous week at $1,763.10, representing a 4.83% decline during the Asian trading, in what has largely been characterized as a “flash-crash.”
Impressively, after gold crashed to $1,677.90 according to investing.com, the market quickly recovered to end the week at $1,781.55, representing a 6.17% gain from Monday’s bottom.
Although these gains are impressive, after Friday’s close, longs in the market were still short of recapturing the key $1,800 level that is considered a prerequisite for the yellow metal regaining some bullish shine.
Now, investors’ attentions are focused on the Jackson Hole gathering in Wyoming. It is an annual retreat for the Fed to examine key strategies for U.S. monetary policy.
There is high speculation that this year’s event, scheduled between Aug 26 and 28, will discuss the tapering of the $120 billion in monthly stimulus that the central bank has been providing the economy since the Covid outbreak of March 2020.
Speculation about a stimulus taper has heightened since last week’s upbeat U.S. jobs report for July that sent the dollar and U.S. bond yields rallying, which has an opposite effect on gold.
Gold appreciated by 0.44% while Silver dipped by -2.52% W-o-W.
Gold prices are expected to be mixed in the coming week, pressured by the Federal Reserve’s Tapering policy and COVID-19 concerns in the market. Investors are advised to trade cautiously as the commodities market is very volatile at the moment.
In other precious metals, Silver is currently trading at $23.74 an ounce, down 2.25% for the week, platinum is back above the $1,000 trading zone to stand at $1,026.10, up 5.33% for the week and palladium is trading at $2,648.50, up 0.82% for the week.
Oil falls seven straight sessions in a row and tending towards 3-month lows
Oil prices were down by more than 1% on Monday, dropping for a straight third session as official data showed that refining throughput and economic activity taper down in China amidst fresh COVID-19 outbreaks.
Indian Strategic Petroleum Reserves Ltd, a company that manages India’s oil inventories, said it has begun selling oil from its Strategic Petroleum Reserve to state-run refiners as it implements a new policy to commercialize its federal storage by leasing out space.
Oil prices fell for a seventh straight session on Friday towards three-month lows as investors became less bullish about fuel demand due to a surge in cases of the COVID-19 Delta variant that is hitting travel. Brent had a weekly decline of -7.02%.
In the coming week, oil prices are expected to dip further on COVID surge, worries about more supply.
NBS economy data release calendar for the week ahead
The NBS release calendar for the coming week indicates the following:
· Monday 23rd August, 2021: Nigerian Capital Importation (Q2 2021) & Selected Banking Sector Data: Sectoral Breakdown of Credit, e-payment channels and Staff strength (Q2 2021).
· Thursday 26th August, 2021: Nigerian Gross Output by Product (Q2 2021)
· Friday 27th August, 2021: National Examination Council: Distribution of Results by State, Gender and Subject- 2020 & Telecoms Data: Active voice and Internet per State and Tariff information (Q2 2021).
Currency Market
The Naira continued its bearish run last week, at the BDC market and I & E FX window majorly attributed to the scarcity of FX.
At the I & E FX window, the domestic currency depreciated by -0.21% on a week-on-week (W-o-W) basis to close at N411.67/US$ at the close of trading on Friday.
Against the US dollar at the BDC it closed at US$1/N517 depreciating by -0.78%, against the British pound it also fell by -1.48% to close at £1/N708, and against the Euro by -1.00% to close at €1/N606.
The Naira closed the week at $/N411.67 at the I&E FX window, at the NAFEX (spot market) it closed at $/N411.20.
More of the same is expected in the week ahead as the Naira is anticipated to continue to hover around N406/$1-N412/$1 threshold in the NAFEX window.
Money Market
Interbank rates were elevated last week, as liquidity levels remained depressed causing rates to continue in its double digits trend.
At the close of the session on Friday, funding rates rose significantly. Open Buyback (OBB) closed at 23.33% while Overnight (O/N) rates closed at 23.83% indicating a W-o-W rise of +39.28% for OBB and +38.14% for O/N rates.
Funding rates are still expected to trade in double digits trend in the coming week in the absence of any maturity.
Treasury Bills Market
The T-bills market was mixed last week, with the yield in treasury bills edging upward while average benchmark yields for OMO bills fell at the close of trading for the week.
At the close of the market last week, average benchmark yields for T-bills rose by +0.33% to 4.69%, OMO bills declined by -22.24% W-o-W to close at 5.95%, CBN’s Special Bill was flat to close at 5.66%.
Activity in the coming week is expected to be dictated by the market liquidity situation.
FGN bond and Euro bond Market
The FGN bond market last week was also mixed as we saw buying interest at the mid and long end of the curve while sell interest was seen for short tenor notes.
The overall average benchmark yields closed at 8.55% for the week which fell W-o-W by -0.28%.
At last week’s bond auction, the DMO offered N150.00 billion worth of FGN FEB 2028, FGN MAR 2036 and FGN MAR 2050, with stop rates of 11.60%, 12.75% and 12.80%, respectively. The subscription stood at N360.02 billion, while N260.09 was allotted. The auction was oversubscribed by +140.01%.
Selling was seen in the Eurobond market last week, as the global risk-off sentiment dampened activity in the market.
We expect the relatively quiet trend to persist in the near term.
Nigerian Capital Market
The Nigerian bourse closed the week on a negative note with some with selling interest in stocks like MEYER. The NGXASI closed the week with a decline of -0.10%. The Nigerian Stock Exchange lost N20.45bn, year-to-date return moderated to -1.96%, while the market capitalization settled at N20.57 trillion.
The volume of stocks traded on the exchange last week rose by +6.88% and the value declined by -1.06% respectively.
Sectoral performance across sectors tracked was bearish last week as the NGX Premium was the highest gainer for the week with +2.28% while NGX Mainboard and NGX Consumer Goods closed negative with -1.48% and -6.31% respectively.
Market breadth for the week was positive with 36 gainers led by HONYFLOUR and PHARMDEKO as against 33 losers led by MEYER and SCOA.
