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Market Update October 2020

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Equity: The equity market sustained its bullish momentum over the month of October with MoM and YTD return at 13.78% and 13.74% respectively. We attribute the stellar rise to the improving domestic investors’ appetite as yields in the fixed income instruments continues to depress.

On a sectorial basis, the market was driven by the following sectors including industrial (+27.88%), Telecoms (+41.02%) and Banking sector (+7.24%).

Going forward till the end of the year, we expect increased domestic investors’ participation in the Nigerian equity market due to the negative real return offered in the fixed income space.

[/vc_column_text][/vc_column][/vc_row][vc_row type=”in_container” scene_position=”center” text_color=”dark” text_align=”left” overlay_strength=”0.3″][vc_column column_padding=”no-extra-padding” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ width=”1/4″][image_with_animation image_url=”8338″ alignment=”” animation=”Fade In”][/vc_column][vc_column column_padding=”no-extra-padding” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ width=”3/4″][vc_column_text]Fixed Income: The yields in the fixed income market continued its downward trend over the month of October. The buoyant level of system liquidity remained the major driver for the downtrend as it averaged c.N400 billion over the period. Consequently, fixed income yields declined by an average of 160bps to 3.71% across the short – mid end of the curve.

Over the rest of the year, we anticipate further reduction in yields given the lower borrowing from FG and level of system liquidity.

 

[/vc_column_text][/vc_column][/vc_row][vc_row type=”in_container” scene_position=”center” text_color=”dark” text_align=”left” overlay_strength=”0.3″][vc_column column_padding=”no-extra-padding” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ width=”1/4″][image_with_animation image_url=”8343″ alignment=”” animation=”Fade In”][/vc_column][vc_column column_padding=”no-extra-padding” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ width=”3/4″][vc_column_text]Oil Prices: Crude oil prices remained volatile over the course of October, with Brent and WTI prices rising to $43.34 and $41.46 respectively on the back of optimism of stimulus package.  Also, over 92% of crude oil production shut down in the Gulf of Mexico due to Hurricane Delta supported the rally in oil prices.

However, on the flip side, concerns about weakening demand on the back of rise in Coronavirus cases in US as well as lockdowns across Europe and uncertainty about US election tapered down the gains earlier recorded in crude oil prices.
Overall, Brent crude oil prices fell by 9%, while WTI declined by 11% on a MoM basis to close at $37.46 and $35.79 as at 31st of October 2020.

Looking ahead, short term oil fundamentals look benign, however we expect gains to be capped by ongoing uncertainty fueled by rising cases of Coronavirus as well as dichotomy between crude oil demand and supply.

 

[/vc_column_text][/vc_column][/vc_row][vc_row type=”in_container” scene_position=”center” text_color=”dark” text_align=”left” overlay_strength=”0.3″][vc_column column_padding=”no-extra-padding” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ width=”1/4″][image_with_animation image_url=”8365″ alignment=”” animation=”Fade In”][/vc_column][vc_column column_padding=”no-extra-padding” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ width=”3/4″][vc_column_text]Inflation: Nigeria’s headline inflation surged to its highest level since February 2018, at 13.7% YoY in September, slightly above our estimate of 13.56% YoY. Again, headline inflation was driven largely by higher food inflation, which accelerated to 16.7% YoY, from August’s 16.0% YoY. While the speed of the increase was somewhat a surprise, food inflation has been pushing higher since mid-2018, with renewed upward momentum following the land border closures in October 2019. Ongoing security, weather-related and structural challenges further added to the rising trend.

Looking forward, we expect the uptrend in year-on-year headline inflation to persist due to sustained impacts of the border closure, adverse impact of elevated transport cost, climatic factors, and FX market restrictions.

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Currency: Across the three FX window, the Naira remained relatively stable against the dollar. We link the stability to a number of factors including stable FX reserve, oil price stability and CBN policies on foreign exchange transactions. Consequently, the parallel market hovered around N460- N465/$ whilst the IEFX and official rate remained flat at N387 and N379 respectively.

 

 

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Outlook: For the coming month, we anticipate further reduction in yields given the lower borrowing from FG and level of system liquidity. For equities, we expect increased domestic investors’ participation in the Nigerian equity market due to the negative real return offered in the fixed income space.

We will continue to invest your assets in safe instruments, as we seek to preserve the value of your assets.

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Personal Finance with Raphael: 5 ways to control Emotional Spending

Emotional spending is an act of buying something for yourself that you don’t need perhaps don’t even really want, as a result of feeling stressed out, bored, under-appreciated, incompetent, unhappy, or even happy. For instance, when you received a raise or on your birthday.

It’s entirely not a bad habit if you can afford to pay for those items seamlessly and have a robust financial plan to cover your goals without having to borrow or struggle to create these plans.

Emotional spending could be a destructive shopping spree to compulsive shoppers and could cause continuous damage to one’s wallet if care is not taken. But don’t fret – we have listed some steps to help control emotional spending. Let’s dive in…

1. Create alternative activities

Are you a compulsive shopper? It’s time to find new activities to keep you busy and take your mind off the need to visit the mall or buy impulsively on your favorite online website.

Secondly, if you use shopping to cure some of your emotional challenges such as when you are unhappy or feeling stressed out hence you have to see a movie, stop at the bar or buy yourself some good stuff- think of a more constructive behavior that can help you save these expenses as they all add up.

Get some exercise if stressed out or lean on family members and friends if you are distressed. If it’s a friend or relative that makes you spend, you can also deal with it by creating other activities that don’t cost much with said person(s).

2. Create a budget to manage unnecessary spending

This includes celebratory. Get the dates and create a budget to manage all these expenses such as someone’s birthday, leaving do etc. Once you finish spending the created budget, that covers it for all expenses in that category.

3. Accountability

Talk to people about your target to control your spending and let them remind you whenever you are about to incur any unnecessary expenses. In addition, you can have a stick-on paper of your needs on your debit card, refrigerator, car steering, etc. so that you can always see your needs before any unnecessary spending. Confront the feelings behind the habit – it can help you get to the root of the problem.

4. Unsubscribe to adverts

Try to stay away from adverts that could cause you to spend unnecessarily either online or otherwise.

5. Wait out impulse spending

When you find something that you feel like buying just because it caught your eye, but you never planned for it, wait it out for 48 hours at least. If you still feel like having it after 48 hours and you still think you don’t need it, wait out another week or month. There is a huge possibility that you can forget about it and let go in 48 hours.

Final words: When you imbibe these steps, you’ve taken a stand against allowing your emotions to come in the way of realising your greatest ambitions.

Need help in creating a financial plan? Talk to us today via [email protected] 

Call For Entry: Deji Alli ARM Young Talent Award 2021

The Deji Alli ARM Young Talent Award (DAAYTA) is an ARM initiative in partnership with TechnoVision’s TVC Labs that aims at providing young Nigerians with an opportunity to develop innovative start-up ventures that add economic value to Nigeria.

The DAAYTA 2021 initiative is in line with ARM’s commitment to Corporate Social Responsibility (CSR) with the aim of building a generation of change leaders, working together to build a better future. It seeks to support business ideas that intentionally create positive societal impact while generating a financial return.

Due to the current global pandemic, it is important to note that the DAAYTA 2021 final event will be held virtually and applications are welcomed from all parts of Nigeria.

Click here to read about:

APPLICATION CRITERIA

To be eligible for the award, the applicant must:

  • be a citizen of Nigeria
  • be between 18 and 30 years of age
  • submit their application which must be their original work
  • have an MVP (minimum viable product) i.e. you have customers
  • be able to fund his/her/team travel expenses and other associated costs if required
  • be available (with co-founders/team where they exist) for the 2-day Pitch Workshop and Final Pitch Event scheduled for February & March, 2021
  • understand the business of ARM, what we stand for; and
  • be ready to represent ARM as an Ambassador

Deadline for December Submission: Monday, December 7th, 2020.

[button color=”undefined” hover_text_color_override=”undefined” url=”https://vc4a.com/technovision/deji-alli-arm-young-talent-award-2021/application/” text=”Apply Here” color_override=”#621a4b”]

PRIZES

The winner of DAAYTA 2021 shall, subject to the Terms & Conditions, receive funding of ₦12,000,000 (twelve million naira) over a period of one (1) year for the following purposes:

  • contribution to working capital.
  • participation in an entrepreneurial education programme at the Pan Atlantic University’s Enterprise Development Centre in Lagos, Nigeria
  • receive a 5-month acceleration support services for the development of their venture by TVC Labs.

For more information on eligibility criteria, kindly refer to the Terms & Conditions here. You can also view the FAQs below.

FREQUENTLY ASKED QUESTIONS

Why is ARM running the Deji Alli ARM Young Talent Award 2021?
The Deji Alli ARM Young Talent Award (DAAYTA) programme was inaugurated by ARM in honor of its founding CEO in 2015 to promote lifelong learning by helping young Nigerian graduates and undergraduates bring ideas to life.

The initiative is in line with the Firm’s commitment to Corporate Social Responsibility (CSR) with the aim of building a generation of change leaders, working together to build a better future.
Who is eligible to participate?
To be eligible for the award, the applicant must

  • be a citizen of Nigeria
  • be between 18 and 30 years of age
  • submit their application which must be their original work
  • have an MVP (minimum viable product) i.e. you have customers
  • be able to fund his/her/team travel expenses and other associated costs
  • be available (with co-founders/team where they exist) for the 2-day Pitch Workshop scheduled for February and March 2021, AND the Winning Pitch Event scheduled for March, 2021
  • Understand the business of ARM, what we stand for; and
  • Represent ARM as an Ambassador

For more information on eligibility criteria, kindly refer to the Terms & Conditions here.

Are there focus areas for DAAYTA 2021?
We are looking for great ideas that are related to Agriculture, Education, Healthcare, Housing, and Transportation.

When is the deadline for submissions?
The deadline for submissions is Monday, December 7th, 2020.

What prize(s) does the winner of the Deji Alli ARM Young Talent Award 2021 receive?
The winner of DAAYTA 2021 Programme will, subject to the Terms & Conditions, receive Funding of N12,000,000 (twelve million naira) over a one (1) year period for the following purposes:

  • contribution to working capital.
  • Participation in an entrepreneurial education programme at the Pan Atlantic University’s Enterprise Development Centre in Lagos, Nigeria
  • receive a 5-month acceleration support services for development of their venture by TVC Labs.

The second stage of the programme will require thirty (30) shortlisted applicants to submit a POEM Framework business plan, a Marketing/pitching video, detailed profiles of their Board (Directors & Advisers), and Team members, sharing their Education, Careers, Key Accomplishments and LinkedIn profiles.

Kindly refer to the Terms and Conditionsfor more details.

Where can I view the full terms and conditions for the Deji Alli ARM Young Talent Award 2021?
You can view the full terms and conditions for the Deji Alli ARM Young Talent Award 2021 here.

[button color=”undefined” hover_text_color_override=”undefined” url=”https://vc4a.com/technovision/deji-alli-arm-young-talent-award-2021/application/” text=”Apply Here” color_override=”#621a4b”]