In the third quarter of 2024, inflationary pressures began to subside globally, with more countries experiencing inflation rates that were either aligned with or nearing the targets set by major central banks. Despite this positive trend, market sentiment remained cautiously optimistic as geopolitical risks and ongoing uncertainties continued to pose challenges to the broader global economic recovery

The Nigerian economy demonstrated resilience in Q2 2024 as Real GDP grew by 3.19% year-on-year, exceeding the 2.51% and 2.98% growth rates in Q2 2023 and Q1 2024, respectively. The Oil sector’s strong performance was the linchpin of this growth, while the Non-Oil sector remained tepid.

In Q3 2024, Treasury bill (T-bill) rates exhibited a seesaw pattern, starting with a surge in yields in the fixed income market. In the Equities market, despite the public offers, rights issues, and interim dividend declarations—particularly from the banking sector, bearish sentiment prevailed in the domestic stock market, leading to a -1.50% decline in the All-Share Index.

We do not expect a decline in Headline Inflation in the near term. We project a GDP growth rate of 3.31% for Nigeria for FY 2024 with the expectation that the Oil sector will play a critical role in supporting overall economic activity, even as challenges persist in the Non-oil sector.

The demand-supply imbalance in the foreign exchange market is expected to continue for the rest of the year, further intensifying pressure on exchange rates. Although the growth in external reserves enhances the Central Bank of Nigeria’s (CBN) ability to intervene, we do not anticipate a substantial appreciation of the Naira in Q4 2024.

In the fixed income market, we expect yields across several instrument to not exceed the levels observed in Q3 2024. For the equities market, we project a mixed performance with moderate positive returns driven by interim dividend payouts and corporate actions.

Please follow the link “Q3 2024 Quarterly Market Report – A Glimmer of Resilience” to view the full report.