As part of a string of positive economic signs amid the ongoing coronavirus pandemic, Nigeria’s external reserves have been on an upward trajectory for a few weeks, offering some foreign exchange relief at a time when the country is faced with a decline in crude oil export earnings and uncertainty still hangs over the global economy.
Experts also see a notable decrease in Forex volatility in the coming weeks with oil, the country’s major foreign currency earner, expected to recover in about two months’ time. Prices took a nosedive with a dip in demand for oil as a third of the world population went into lockdown to curb the spread of the coronavirus. But as governments across the world lift movement restrictions and global economies gradually reopen, prices are expected to rebound.
More so, the Organization of Petroleum Exporting Countries and allies (OPEC+) is looking to keep the existing production output cuts beyond the June expiry date as part of efforts to re balance the oil market. Read more here.
Below is the Ventures Africa Weekly Economic Index, for the week ending 29th of May 2020. This economic index gives you a glimpse into other recent activities in Nigeria’s economy as well as changes and prices that could affect the economy:
Nigerian Stock Exchange
Data released by the Nigerian Stock Exchange (NSE) as of May 29, 2020, showed that the NSE All-Share Index and Market Capitalization both appreciated by 0.25 percent to close the week at 25,267.82 and N13.168 trillion respectively. All other indices finished higher with the exception of NSE Meri Value and NSE Oil/Gas Indices while NSE ASeM closed flat.
Top price gainers and decliners in the week under review:
Top five price gainers
Neimeth International Pharmaceuticals Plc.
Skyway Aviation Handling Company Plc.
Axamansard Insurance Plc.
Glaxo Smithkline Consumer Nig. Plc.
Top five price decliners
Regency Assurance Plc.
Learn Africa Plc.
Ecobank Transnational Incorporated
Transnational Corporation of Nigeria Plc.
How did the Naira fare?
The Nigerian currency rose against the dollar at the close of last week, trading at 387 Naira per dollar, an appreciation from the 388 per dollar recorded a week before.
How did the price of oil fare?
Oil on Friday 29th of May 2020 saw a weekly drop as international benchmark Brent slid to $35.47 from $37.40 a week earlier. Traders have their attention on this week’s meeting of the Organization of the Petroleum Exporting Countries and allies (OPEC+) during which discussions will focus on whether to extend record production cuts beyond end-June.
On Monday, the first day of trading in the contract with August as the front-month, Brent crude fell 34 cents to $37.50 a barrel while West Texas Intermediate (WTI) crude futures for July delivery were at $35.17 a barrel, down 32 cents. The price falls come after both benchmark prices posted their strongest monthly gains in years in May, boosted by OPEC crude production dropping to its lowest in two decades, on the back of low oil consumption. Demand however is expected to recover as more nations emerge from coronavirus lockdowns.