Taiwo Adekeye, FMVA

December 7, 2023
The voluntary decision by Russia and Saudi Arabia to cut supply beyond Q1′ 2024 has failed to stimulate the market. However, Prices were affected by china’s economic situation after Moody’s rating agency changed China’s A1 rating’s outlook from stable to negative. Brent crude futures dropped by $1.59, representing a 2.06% decline, settling at $75.61 per barrel while, U.S. WTI crude futures experienced a $1.67 decrease, equivalent to a 2.31% drop, hitting $70.65 per barrel.
Nigeria: Forex turnover grew by 92.93% as NGN strengthens against the USD
The domestic currency depreciated 15.19% to close at N951.22 to a dollar at the close of business representing N144.49 loss in the local currency compared to the N806.73 it closed on Tuesday. The intraday high reached N1159.10/$1, while the intraday low was N701/$1, indicating a significant spread of N458.1/$1. Forex turnover was $135.58 million at the end of trade, which was 4.94% less than the day before. Nevertheless, the naira strengthened in the parallel forex market where forex is traded unofficially. The exchange rate appreciated by 0.43%, quoting at N1165/$1, while peer-to-peer traders quoted around N1173.51/$1.
Namibia: Namibia maintains its key rate due to anticipated slowing inflation.
The central bank of Namibia kept its policy rate constant, citing weak credit expansion, ongoing economic slack, and a predicted decline in next year’s inflation. The Bank of Namibia hiked the rate by 50 bps in June and twice by 25 bps earlier in 2023. This makes it the third consecutive decision to keep it steady at 7.75%. However, it was projected during the October MPC meeting that Inflation will continue to drop to 4.8% in the coming year.
Mozambique: Mozambique expects more economic expansion and a larger deficit by 2024.
Mozambique’s GDP is expected to rise by 5.5% the next year, but its budget deficit would increase to 10.4% of GDP due to debt repayment, public sector wage changes, and election-related expenses. Over the last ten years, the economy of the country in southern Africa has had several setbacks, such as a hidden debt issue, severe storms, and an insurgency associated with the Islamic State that is centered in the gas-rich region of Cabo Delgado. Next year’s deficit would be funded by 3.0% of GDP in domestic borrowing, 1.9% of GDP in foreign loans, and 5.4% of GDP in external grants.
India: The Indian government requests parliamentary approval for extra pending in FY24.
The Indian government has requested approval from its parliament to increase expenditure in the current fiscal year by 1.29 trillion rupees ($15.48 billion), mostly for programs that will create jobs in rural areas and increase farmer subsidies. The increased spending in this fiscal year won’t cause the budget deficit to increase over the 5.9% of GDP objective because tax revenue is probably going to be greater than anticipated. According to Prime Minister Narendra Modi’s government, a strategy to reduce rural unemployment would cost an additional 145.24 billion rupees, while subsidies for fertilizer would cost 133.51 billion INR.
China: China’s blue-chip stocks slumps to an almost five-year low
Moody’s downgrade of China’s credit outlook caused markets to struggle. China’s blue-chip stocks fell to an almost five-year low and the yuan currency continued to lose value. China stocks opened lower, with the CSI300 Index hitting its lowest level since February 2019 before recovering from earlier losses. It ultimately closed up 0.2%, while the Shanghai Composite Index was down by 0.1%. Moody’s decision to downgrade its outlook on China’s debt is the latest link in a long string of recent disappointments for investors in Chinese equities