THIS WEEK: Bitcoin Price Plunges, NGX ASI Breaks Record, CBN Gov’s Surprise Decision

The Nigerian stock market ended the week on a positive note, with the performance of the benchmark year-to-date (YTD) jumping 19.24%, making NGX one of the best performing markets. in the world. However, the foreign exchange reserve contracted over the week, falling $248 million to $39.37 billion on Friday, signaling a pessimistic turn for some macroeconomic indicators.

The Central Bank of Nigeria has expressed concern over transactions involving the Republic of Benin, but more interesting is the news of CBN Governor Godwin Emefiele buying the APC presidential nomination and protest form from Nigeria. ‘interest.

These and many more happened during the week, therefore Nairametrics has compiled a list of notable events in the macro economy, stock market, regulators and crypto market that have made the one of the newspapers.

MACROECONOMICS

Nigeria spends 96% of revenue on debt servicing in 2021, worst on record

  • Nigeria’s external reserve contracted during the week with a decline of $248 million (WoW) to stand at $39.37 billion as of Friday, May 5, 2022, from a recorded $39.43 billion the previous week.
  • The decline in the level of the country’s reserves is widely attributed to the continued intervention of the Central Bank of Nigeria in the official foreign exchange market, as a means of managing market volatility.
    Nigeria’s debt service to revenue ratio has reached 96%.
  • Notably, the Nigerian federal government has committed a sum of N4.22 trillion naira for debt servicing in 2021, up 29.3% from the N3.27 trillion spent the previous year. On the other hand, revenue for the period rose only slightly by 9.3% to N4.39 trillion.

Exchange rate: the naira appreciates against the dollar

  • The naira rose against the US dollar during the week, registering a 0.5% appreciation to close at 417 naira/$1 at the official Investors and Exporters counter on Friday.
  • The market only opened for three days, due to a public holiday declared by the federal government on Monday and Tuesday in celebration of Eid Al-Fitr.
  • A sum of $359.36 million was traded in the market during the week, compared to $788.44 million traded the previous week.
  • The parallel market exchange rate remained stable during the week, maintaining a rate of 590 naira per dollar.

Nigerian pension fund assets gained N453.8 billion in Q1 2022

  • Nigeria’s pension fund assets increased from 453.8 billion naira in the first quarter of 2022 to 13.88 trillion naira at the end of March 2022, representing its highest level.
  • The sector’s assets under management grew by 3.38% during the review period, from N13.4 billion in December 2021.
  • However, 12,336 PFA contributors transferred their RSA account from one PFA to another during the period under review. This is 4.2% less than the 12,874 contributors who changed in the previous quarter. This brings the total number of RSA accounts transferred to 63,728 since the fourth quarter of 2020.

REGULATION

CBN warns Nigerian banks to be vigilant over Benin Republic-related transactions

  • The Central Bank of Nigeria has warned Nigerian banks to be vigilant regarding transactions linked to the Republic of Benin due to intelligence suggesting that the country is increasingly becoming a transit and consumption center for drug trafficking in West Africa. the West.
  • The apex bank called for additional measures such as reclassifying related customers and conducting enhanced due diligence. CBN has also asked Nigerian banks to strengthen its Know Your Customer (KYC) and Customer Due Diligence (CDD) policies as required by regulations.

CBN says next eNaira update will support DSTV, Air Travel and USSD transactions

  • The CBN has announced that the next eNaira update will support DSTV renewals, recharge card purchases, airline ticket payments, among others.
  • CBN is now in the second phase of the eNaira onboarding process, with the first part focusing on people who already have bank accounts.

MARKETS

Gold Recovers Above $1,900 Despite Fed Interest Rate Hike

  • The yellow metal is bullish above $32 at the start of London’s trading session today, despite the US Federal Reserve raising interest rates in its latest effort to rein in inflation. The Fed highlighted inflation as a risk to the economy while ruling out bigger hikes for the rest of 2022.
  • The surge in the price of gold came unexpectedly, especially after the US Fed raised interest rates as it made its policy decision.
  • The increase in the interest rate should have brought a strong dollar index (a measure of the strength of the US dollar), however, we saw a drop, which suggests that the increase in the interest rate has already been embedded in risky assets like gold.

Bullish Oil on a Weaker Dollar and Proposed EU Sanctions

  • Prices for the two major oil benchmarks are bullish in London’s trading session today following the European Union’s proposal for new sanctions against Russia, including a crude embargo in six months, which offset concerns about Chinese demand.
  • The global benchmark, Brent crude futures, ended the week at $113.22 a barrel, while the United States (US) benchmark, West Texas Intermediate crude futures, ended the week at $110.61 a barrel. Both benchmarks gained more than 5% over the week.
  • The sanctions proposal, which was announced by European Commission President Ursula von der Leyen, still needs the unanimous support of all 27 EU countries to enter into force. The sanction proposal includes phasing out supplies of Russian crude in six months and refined products by the end of 2022.

NGX ASI breaks a record and is now trading above 50,000 BP

  • The NGX closed on a positive note amid interest selling and buying as the benchmark All-Share Index (ASI) rose during the week to currently trade above 50,000. basis points, for the first time in nearly 14 years.
  • The NGX ASI closed the week at 50,935.03 points, which puts its performance since the beginning of the year (YTD) at 19.24%, making the NGX one of the best performing markets in the world. Also as of Friday’s market close, the market capitalization stood at 27.46 trillion naira at the end of the trading day.

Dangote Cement raises N116 billion in the largest corporate bond issue in the Nigerian capital market

  • Dangote Cement, the largest cement producer in sub-Saharan Africa, has raised N116 billion in the largest corporate bond issue in the Nigerian capital market.
  • Dangote Cement said it has completed the issuance of N116 billion Series 2 fixed rate senior unsecured bonds under its N300 billion multi-instrument issuance program.

INTERNATIONAL

Amid EU’s proposed Russian oil ban, ruble gains 11% against dollar and euro in one week

  • Despite the proposed oil ban proposed by the European Commission, the Russian ruble has shown extraordinary resilience, rising more than 10% against the dollar and the euro in one week.
  • Fears of a recession in the euro zone and the bearish momentum of the euro have revived the possibility that the currency will reach parity with the dollar.
  • The Russian ruble has seen significant gains against the US dollar over the past month. At the time of writing, the ruble was up 22.29% against the dollar and 25.37% against the euro.

POLITICS

CBN Governor Godwin Emefiele picks N100m APC presidential forms

  • The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has reportedly paid the sum of N100 million for the All Progressives Congress (APC) Presidential Nomination and Expression of Interest Form.
  • According to media reports, the forms were chosen on behalf of the CBN Governor by his associates around midday in Abuja, and he is expected to run under the platform of the ruling APC.

CRYPTOCURRENCY

Over 100,000 traders lose $403 million as Bitcoin falls below $36,000

  • It was a sea of ​​red in the cryptocurrency space that saw 103,518 traders have their accounts liquidated selling Bitcoin and other cryptocurrencies, a day after the US Federal Reserve issued its statement. political decision to raise the interest rate by half a percentage.
  • Liquidation refers to when an exchange forcefully closes a trader’s leveraged position due to a partial or full loss of the trader’s initial margin. This happens when a trader is unable to meet the margin requirements for a leveraged position (does not have sufficient funds to keep the trade open). Liquidation occurs in both margin and futures trading.
  • Total liquidations for these traders amounted to $403.42 million, with longs accounting for $344.52 million or 85.40% of total liquidations. Shorts accounted for the rest of the total amount ($58.9 million).

Over $1.6 billion stolen from DeFi platforms so far in 2022

  • The decentralized finance (DeFi) ecosystem has not had a bumper year as this sector of the cryptocurrency space has been plagued by hacks, exploits, and scams. In just over four months in the new year, more than $1.6 billion worth of crypto was stolen from users, surpassing the total amount stolen in 2020 and 2021 combined.
  • Analysis by blockchain security firm CertiK revealed stats showing March had the highest value stolen at $719.2 million, over $200 million more than was stolen in 2020. The March figure is the result of the Ronin Bridge exploit where the hackers stole over $600 million worth of crypto, on the world’s largest Play-to-Earn (P2E) platform.

Institutional Investors Sold $133 Million in Bitcoin-Linked Investments Last Week

  • Institutional investors lost $133 million worth of bitcoin investment products last week, marking the biggest week of outflows since June last year, as the price of bitcoin fell below $38,000 on fears of the imminent hike in US Federal Reserve interest rates.
  • According to CoinShares’ weekly Digital Asset Fund Flows report, the global digital asset fund last week saw a decline of $120.1 million, with Bitcoin’s selloff being slightly offset by a surprise buying of $38 million. dollars for FTX’s native token, FTT Token products.
  • The $132.7 million in sales of BTC funds last week brings month-to-date (MtD) sales for April to $310.8 million. We also saw sales of Ethereum products that amounted to $25.1 million. The performance MtD for Ethereum-based products currently stands at $82.3 million.

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