Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
  • Markets
    • Cryptos
    • Commodities
    • Equities
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Industries
    • Company News
    • Consumer Goods
    • Content Partners
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Tech News
  • Economy
    • Get Data
    • Macro-Economic News
    • Research Analysis
  • Business News
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
  • Markets
    • Cryptos
    • Commodities
    • Equities
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Industries
    • Company News
    • Consumer Goods
    • Content Partners
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Tech News
  • Economy
    • Get Data
    • Macro-Economic News
    • Research Analysis
  • Business News
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
No Result
View All Result
Nairametrics
No Result
View All Result
Home Opinions Op-Eds

2021 Macroeconomic and Equities outlook

CSL Stockbrokers by CSL Stockbrokers
February 1, 2021
in Op-Eds
Here is What This Foreign Investor Thinks about The Nigerian Economy and The Naira
Share on FacebookShare on TwitterShare on Linkedin

Last week, we published Nigeria’s Macroeconomic and Equities outlook for 2021, which reflected our views on the economy and financial markets. In our view, without a doubt, 2021 has begun amidst uncertainties for the Nigerian economy. The Nigerian economy slumped into recession in 2020, occasioned by the headwinds associated with the Covid-19 pandemic. We project the economy to contract by 2.7% in 2020.

The economy is projected to exit recession in 2021, supported by the gradual normalization of economic activities, as the impact of the lockdown in 2020 continues to fade. We expect growth to be driven by the non-oil sector, supported by gains from agriculture and the telecommunication sectors, the combination of which accounts for about 38% of the GDP basket. Downside risks to our forecast are linked to the lingering effects of the pandemic caused by the delayed distribution of effective vaccines.

The inflation rate grew strongly in 2020, on the back of supply chain disruption emanating from the pandemic, FX restrictions, border closure and climate-related shocks. Inflation is poised to maintain its ascent in 2021, with pressure expected from both the food and core baskets of the CPI. Overall, we expect headline inflation to average 16.4% in 2021 (compared with 13.9% in 202o) with year-end figure at 14.6%. In 2021, we expect the current account deficit to narrow (estimated at USD10.80bn (2.31% of the GDP), supported by a gradual recovery in global economic activities and firming crude oil prices.

RelatedPosts

Nigeria’s inflation rate drops further to 17.75% in June 2021

Foreign portfolio investments in Nigeria drops by 77.4% in Q1 2021

The Naira was devalued across all the segments of the FX market in 2020. In 2021, with crude oil prices poised to improve alongside dollar-dominated-budget facility from the World Bank, we expect the CBN’s monthly intervention to gradually increase to pre-pandemic levels and we expect the CBN to devalue the Naira to at least NGN420.0/USD in 2021. With GDP growth projected to turn positive in the second quarter, the CBN might progressively re-direct its policy to a hawkish stance, in favour of exchange rate stability.

The NSE bourse’s valuation (relative to peers) at the beginning of 2020 was underpriced at 7.1x (MSCIEM:15.4x, South Africa: 15.7x, and Egypt:11.8x). By the end of the year, however, the trend had reshuffled a bit with the Nigerian market recording a P/E ratio 15.0x trumping Egypt (12.0x) and Kenya (11.0x) while trailing South Africa (27.0x), MSCIEM (25.0x), and MSCCIFM (22.0x). Even though the market had a bullish run in 2020, the performance was driven mainly by gains from stocks in the Industrial Goods sector and some food processors.

In our view, many of the banking tickers remain relatively undervalued with many trading significantly below book value.

We believe the factors that would determine the path of the market in 2021 have expanded beyond oil price, monetary policy and the external economy to include financial system liquidity, yields in the fixed income space, corporate performances and corporate actions.

Within our coverage universe, we retain Buy ratings on UBA, Access, Zenith, Guaranty Trust Bank, FBNH, Dangote Cement, MTNN, Flourmills and Dangote Sugar. Essentially, we anticipate that for as long as buying interest in the market is sustained, we expect a re-rate of these stocks.


CSL Stockbrokers Limited, Lagos (CSLS) is a wholly owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission, Nigeria. CSLS is a member of the Nigerian Stock Exchange.

Related

Tags: Economy

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Mega Millions
Hot forex
Cornerstone
Polaris Bank
Access Bank
Bankers Committee
First bank


FCMB




    Business News | Stock Market | Money Market | Cryptos | Financial Literacy | SME |

    Recent News

    • Citigroup says oil prices may crash to $65 by end of 2022 due to recession
    • Nigeria’s stock market closes bearish as market capitalization dips by N110 billion
    • IPOB disowns Peter Obi’s presidential bid, says he was never their member

    Follow us on social media:

    Recent News

    Crude oil, Oil down as China releases fuel reserves, Oil down as China releases fuel reserves

    Citigroup says oil prices may crash to $65 by end of 2022 due to recession

    July 5, 2022
    Bears market

    Nigeria’s stock market closes bearish as market capitalization dips by N110 billion

    July 5, 2022
    • ABOUT US
    • CONTACT US
    • PRODUCTS
    • ANDROID APP
    • iOS APP
    • DISCLAIMER
    • CAREERS
    • PRIVACY POLICY

    © 2022 Nairametrics

    No Result
    View All Result
    • Home
    • Exclusives
      • Financial Analysis
      • Corporate Stories
      • Interviews
      • Investigations
      • Metrics
    • Markets
      • Cryptos
      • Commodities
      • Equities
        • Dividends
        • Stock Market
      • Fixed Income
      • Market Views
      • Securities
    • Industries
      • Company News
      • Consumer Goods
      • Content Partners
      • Corporate deals
      • Corporate Press Releases
      • Energy
      • Entertainment
      • Financial Services
      • Hospitality & Travel
      • Manufacturing
      • Real Estate and Construction
      • Tech News
    • Economy
      • Get Data
      • Macro-Economic News
      • Research Analysis
    • Business News
    • Financial Literacy
      • Career tips
      • Personal Finance
    • Lifestyle
      • Billionaire Watch
      • Profiles
    • Opinions
      • Blurb
      • Op-Eds

    © 2022 Nairametrics

    Social Media Auto Publish Powered By : XYZScripts.com