GLOBAL EQUITIES MARKET ON JULY 30, 2022

At the end of the week, global equity markets were broadly bullish as key indices gained. The current rally has coincided with a meaningful pullback in longer-term interest rates, with the 10-year yield falling from 3.5% to 2.8%. The S&P 500 and NASDAQ indices in the US gained by 3.7% and 4.1%, respectively, w/w. Estimates indicate that the energy, materials, and industrial sectors experienced considerable earnings growth at the sector level. Despite rising ticket costs and a rise in flight cancellations, airlines were able to surpass earnings projections due to stronger-than-anticipated demand.

 

In Europe, the FTSE in the UK and the DAX in Germany posted weekly increases of 2% and 1.7%, respectively. Attributable to the Stoxx 600 increasing by 1.3%, oil and gas stocks led the gains by increasing by 2.9% as almost all sectors concluded in positive territory except for health care, which declined by 0.4%.

 

In Asia, nearly all equities fell w/w as tech companies took a hit. Japan's Nikkei 225 index fell by 0.4%, Hong Kong's Hang Sen index fell by 2.2%, and China's Shanghai Composite index fell by 0.5%. This is because Chinese leaders signaled on Thursday that Beijing will not attempt to stimulate the economy and downgraded the country's gross domestic product target of "about 5.5%". India's SENSEX was an outlier in the Asian market, growing 2.7% w/w. Ghana's GSE and South Africa's FTSE gained by 3.2% and 1.3% w/w, respectively, whilst Nigeria's ASI declined by 3.1% w/w.

 

WEEKLY CURRENCY UPDATE

In the FX market, there was a mixed performance as Peso, Cedi and Naira depreciated against the US$ by 1.1%, 2.1% and 0.2% respectively. On the other hand, Rands, Euro, Rupee, Yen and Yuan all appreciated the US$ by -1.1%, -0.2%, -0.7%, -2.0% and -0.1% respectively.

 

DOMESTIC EQUITY

The Nigerian equity market declined 3.1% w/w to settle at 50,370.25 points. Consequently, the Year-To-Date (YTD) return of the market stood at 17.9%. Across market indices under our coverage, performance was bearish as all indices closed in red w/w. The Insurance Index fell 500bps, Consumer Goods Index fell 460bps and Oil and Gas Index 100bps. Similarly, the Banking and Industrial Goods Indices fell 40bps and 20bps respectively.

 

FIXED INCOME MARKETS

In the fixed income market, performance was largely bearish as the average yield rose 10bps to 11.95%. Major selloffs were witnessed across the yield curve with the yield on the March 2050 instrument which rose the highest by 34.0bps to 13.49% w/w.