Daniel Wesonga
Nigerian equities firmed ahead of today’s GDP release, with the NGX All-Share Index up to around 0.21% on Thursday. Today’s print will test whether momentum is extending beyond Q1’s services-led upswing. The statistics office reported that services remained the economy’s anchor in Q1, with telecoms/ICT a notable bright spot.
The Q2 year-on-year growth rate is expected to improve compared to the previous reading, although growth is expected to be modest on a quarter-on-quarter basis. A result close to that range would reinforce the “steady-but-unspectacular” recovery narrative supporting the stock market.
However, the market could remain exposed to the declining oil prices. The latter are on a second successive session of losses after a brief rebound. The downside risks and volatility could affect sentiment and leave some investors on edge.
Next up is the CBN MPC meeting on 22 – 23 Sep, where the committee weighs inflation and growth concerns, with the policy rate currently held at 27.50%. Sector details from today’s GDP, especially the balance between services resilience and oil price variability, could shape positioning for the meeting.
Wesonga is Senior Sales Manager at Pepperstone
