| GLOBAL ECONOMY The US economy contracted at an annualized rate of 0.30% in Q1 2025, marking the first decline since Q1 2022. This was a sharp decline from a 2.40% growth in Q4 2024 and below market expectations of 0.30% growth. A 41.30% increase in imports contributed to the contraction, as businesses and consumers rushed to stockpile goods in anticipation of higher costs following the series of tariff announcements by the Trump administration. Consumer spending growth also fell to 1.80%, while Federal Government Expenditures fell to 5.10%. The UK Manufacturing Purchasing Managers Index (PMI) for April 2025 rose slightly to 45.40, above 44.90 in March 2025. Despite the increase, the index is in contraction territory, reflecting a sharp decline in the sector. Output declined as manufacturers reduced production in response to weakening demand from both domestic and international markets, amid mounting economic and trade uncertainty. Investors are banking on Bank of England (BoE) rate cuts to support the economy from escalating global trade tensions. The Eurozone Consumer price inflation remained steady at 2.20% in April 2025 while the Bloc’s economy grew by 0.40% in Q1 2025, surpassing expectations of a 0.20% increase. Among the Union’s largest economies, Germany expanded by 0.20%, supported by solid consumption and investment, while France had a modest 0.10% gain amid weak investment and exports. Meanwhile, Spain and Italy outperformed, posting growth of 0.60% and 0.30%, respectively. China’s official Manufacturing Purchasing Managers Index (PMI) fell more than expected, dropping to 49.00 from 50.50 in March. This provides a bleak look at the health of China’s economy following the Trump administration’s imposition of a 145% tariff on Chinese goods, increasing calls for further stimulus amid ongoing trade tensions with the US. China is considering the possibility of discussing tariffs with the U.S., according to a statement from the Chinese commerce ministry, amid ongoing trade Sino-US trade war. Next week, Investors focus will turn to potential tariff negotiations between the US and China, the Federal Reserve’s (Fed) interest rate decision, and subsequent remarks from Fed officials. GLOBAL MARKETS US stocks rallied on Friday, fueled by a strong jobs report and signs of easing US-China trade tensions that boosted investor confidence. Compared to last week, the Nasdaq, S&P 500 and Dow Jones indices increased by 3.42%, 2.92% and 3.00% to 17,977.73, 5,686.67 and 41,317.43, respectively. In the UK and across Europe, investor sentiment improved supported by optimism over US-China trade talks and positive corporate earnings as stocks with significant exposure to international trade or US markets were among the notable gainers. The London’s Financial Times Stock Exchange (FTSE) 100, France Cotation Assistée en Continu (CAC) 40 and Germany’s Deutscher Aktien (DAX) indices increased by 2.15%, 3.11% and 3.80% to 8,596.35, 7,770.48 and 23,086.65, respectively. China is evaluating recent diplomatic efforts from the US aimed at restarting negotiations, raising hopes that the world’s two largest economies may begin talks to end a protracted trade war, leading to increased Investor’s confidence. The Hang Seng and Topix indices increased by 2.38% and 2.27% to 22,504.68 and 2,687.78, respectively. We expect the current sentiments to persist next week alongside a wave of Q1 earnings reports. DOMESTIC ECONOMY Nigeria’s Non-Oil Exports Hit $1.79billion in Q1 2025, up by 24.75% – NEPC Nigeria’s non-oil exports rose to $1.79billion, in Q1 2025, according to the Nigeria Export Promotion Council (NEPC) on Monday during the presentation of the First Quarter Progress Report on Non-Oil Export Performance for 2025. This is a 24.75% increase compared to $1.44billion recorded in Q1 2024, signalling positive momentum in Nigeria’s efforts to diversify its economy away from oil dependency. Cocoa and its derivatives – including cocoa butter, cocoa liquor, and cocoa cake – topped the list of exported products in Q1 2025. Other key products include Urea/Fertiliser, Cashew Nuts, Sesame Seeds, Gold Ore, Aluminium Ingots, Copper Ingots, Soya Beans/Meal and Rubber. CBN records ₦38.84billion profit in 2024, recovers from ₦1.15trillion loss in 2023 The Central Bank of Nigeria (CBN) has released its 2024 audited financial statements, reporting a profit after tax of ₦38.84billion, a recovery from the ₦1.15trillion loss recorded in the 2023 financial year. The strong performance was driven largely by strong growth in interest income and other operating income, particularly net unrealized Foreign Exchange revaluation gains of ₦11.28trillion, up 225% year-on-year. This surge contributed to a total operating income of ₦15.10trillion, compared to ₦5.91trillion in 2023. Interest expenses surged even more, rising by 185% to ₦4.98trillion. As a result, net interest income fell by 94.41% to ₦122.91billion, down from ₦2.20trillion in the previous year. Nigeria’s GDP per capita falls to $824, worse than 1960 levels The President of the African Development Bank (AfDB), Akinwumi Adeshina, stated that Nigeria has a current GDP per capita of $824. He stressed the need for Nigeria to transform its economic model to become an industrialised nation by 2050. He also attributed the nation’s economic decline to decades of policy missteps, institutional weaknesses, over-reliance on crude oil exports, and underinvestment in key sectors. AfDB to invest $650million annually in Nigeria’s growth The AfDB has approved a new five-year Country Strategy Paper (CSP) for Nigeria, committing $650million annually between 2025 and 2030 to drive economic transformation, build resilience, and promote prosperity. The Bank will provide $2.95billion over the first four years of the plan, with an additional $3.21billion expected from development partners through co-financing. The strategy focuses on two priority areas: promoting sustainable, climate-smart infrastructure to enhance competitiveness and industrial development, and advancing gender and youth-inclusive green growth through industrialisation. Nigeria and China strengthen trade ties amid global tariff tensions Nigeria and China are engaging in bilateral talks aimed at improving trade relations and reducing tariffs, as both nations navigate the challenges posed by escalating global trade tensions. On the sidelines of the BRICS Foreign Ministers’ Meeting in Rio de Janeiro, Nigeria’s Minister of Foreign Affairs, Yusuf Tuggar, held a bilateral meeting with China’s Foreign Minister, Wang Yi, to explore avenues for economic cooperation through improved trade, reduced tariffs, and increased investment. We await the CBN publications on the economic performance of the Nation for the month of April 2025. DOMESTIC MARKETS MONEY MARKET AND FIXED INCOME System Liquidity remained positive throughout the week, supported by inflows of ₦259billion in FGN bond coupons, ₦132.06billion in derivatives, and other CBN inflows. Despite liquidity outflows from a ₦804.85billion OMO auction, Cash Reserve Ratio (CRR) debits, FX settlements, and bond settlements, it opened at ₦1.37trillion and closed at ₦1.25trillion. Consequently, short-term rates remained stable, with the Overnight Policy Rate (OPR) unchanged at 26.50%, while the Overnight Rate (O/N) declined slightly by 5bps to close at 26.83%. The Nigerian Treasury Bills (NTB) market average yield increased by 27bps to 21.03% last week. In the Bonds market, the average yield for the Short-tenor bonds increased by 1bp to 19.07%. The average yield of the Medium-tenor bonds remained flat at 19.22% while the average yield for the Long-tenor Bonds decreased by 2bps to 17.79%. The FGN Bond auction held this week on Monday, 25th April 2025. The auction witnessed moderate demand, as total subscription was 1.42x the offer, at ₦495.95billion. The Debt Management Office (DMO) sold a total of ₦397.90billion, slightly above ₦350billion initially offered, with non-competitive allotments of ₦123billion. The stop rates for the 2029 and 2033 bonds were unchanged at 19.00% and 19.99%, respectively. We anticipate cautious trading in the Fixed Income space as Investors await the Treasury Bills auction scheduled to hold next week with an offer of ₦550billion across tenors. EQUITIES MARKET The market opened for four trading days this week as the Federal Government of Nigeria declared Thursday 1st May 2025 as Public Holidays to commemorate 2025 Workers’ Day celebration. The NGX All-Share Index and Market Capitalization increased by 0.27% and 0.28%to close the week at 106,042.57 and ₦66.65trillion from 105,752.61 and ₦66.47trillion last week. A total turnover of 2.20 billion shares worth ₦75.41billion in 70,329 deals was traded this week by investors on the floor of the Exchange, in contrast to a total of 1.85 billion shares valued at ₦56.03billion that exchanged hands last week in 51,386 deals. On a sectoral basis, the Banking, Insurance and Oil and Gas indices closed negative, at -0.38%, -2.89% and -2.90%, while the Consumer Goods and Industrial Goods indices both closed positive at 2.89% and 0.41%, respectively. Notable gainers this week were Associated Bus Company Plc and Legend Internet Plc, while notable losers were Ecobank Transnational Incorporated and Multiverse Mining and Exploration Plc. We expect cautious trading, amidst sustained buying interests of select stocks with robust Q1 earnings. |
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