| What shaped the past week?
Global: Global investors remain cautiously optimistic about the state of the global economy, as we saw mixed sentiment across major markets. Additionally, they digested the latest statements from policy makers in key central banks. Starting in the U.S., stocks remain under pressure due to investor pessimism over the position of the U.S. Federal Reserve and speculation of weaker corporate earnings. With liquidity moving into haven assets, equity markets in the region kicked off the new year on a somber note. The NASDAQ lost 1.81% w/w, while the Dow Jones and S&P 500 recorded minimal gains up 7bps and 1bp w/w. Moving to Europe, investors will continue to monitor the impact of energy inflation on households and businesses in the region. This week, investor focus was centered on the latest batch of data for the Eurozone; notably, the release of new data on retail sales in Germany came in at 1.1% up m/m, and rose 4.8% y/y. The German Dax rose 4.19% w/w, while the FTSE 100 gained 3.14%. Finally, it was a mixed bag across Asia as investors remain unnerved about rising COVID cases in China. The Nikkei-225 fell 0.40% w/w, whereas the Kopsi Composite and Shanghai Composite rose 2.40% and 2.21% w/w respectively.
 Domestic Economy: To start the year, President Buhari signed the 2023 Appropriation Bill into law. The budget was increased by ₦1.32 trillion from the initial proposal of ₦20.51 trillion to ₦21.83 trillion. The budget breakdown showed that recurrent expenditure was maintained at ₦8.27 trillion while capital expenditure was increased by (+10% to 5.9 trillion) and debt service (+4.6% to 6.6 trillion). Provisions for Ministries, Departments and Agencies was also increased by ₦58.55 billion. The signed budget is based on an oil price benchmark of $75 per barrel (previously: $70 per barrel), while other parameters such as crude oil production and exchange rate were retained at 1.69 million bpd and 435.57/$ respectively. Other key changes include a ₦765.79 billion increase in the projected revenue to ₦10.49 trillion, and an unfunded deficit of ₦553.46 billion which could imply increased borrowing. This could increase fiscal sustainability concerns despite plans to eliminate subsidies in the second half of 2023.
Equities: Local investor sentiment was mixed w/w, as investors remain cautious on the equities space while they await the release of FY’22 earnings results. The market posted a marginal 0.06% w/w loss, due to selling pressure in AIRTELAFRI (-8.26% w/w), which had risen 9.98% in the previous week. Meanwhile, the Consumer Goods and Banking sectors closed higher w/w, up 6.44% and 3.61% respectively. ACCESSCORP and NB were the top performers across their respective sectors, rising 5.88% and 14.63% w/w. On the other hand, losses across mid-cap players in the Industrial Goods space, saw the sector sink 0.58% w/w. Finally, in the Oil and Gas space, moderate gains by players in the downstream sector resulted in a 0.06% gain for the sector.
Fixed Income: Fixed income investors were buy-side driven w/w, as liquidity levels remained positive. In the Bonds space, yields on benchmark bonds eased 38bps w/w on average fueled by broad-based interest across the bond curve. Likewise, in the NTB space, we observed significant buy-side action over the week, as yields eased 99bps w/w. Finally, given muted activities in the OMO space, yields remained unchanged w/w
Currency: The Naira depreciated ₦0.20 w/w at the I&E FX Window to ₦461.70.
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