Mutual Funds Factsheet May 2022 Click to add text

Transcript:Mutual Funds Factsheet May 2022 Click to add text:
Mutual Funds Factsheet May 2022 Click to add text GLOBAL The key macro drivers during the month included, monetary policy actions by global central banks, continued lockdown restrictions in some provinces in China due to the spread of the covid-19 and the lingering tension between Russia and Ukraine. The geopolitical tensions in Europe appear with no end in sight with the recent sanctions placed on Russian seaborne oil amidst elevated gas prices. The US FED raised benchmark interest rates by 50 basis point at its meeting in the month of May, in its quest to address the rise in inflation. Although headline inflation moderated to 8.3% y/y (March - 8.5% y/y), it came in above expectations. In China, further outbreak of the omicron variant resulted in Beijing and Tianjin provinces tightening restrictions. Financial markets took a breather from the losses recorded in the prior month with the MSCI All Country World index rising by 0.2% in May, with value stocks outperforming their growth counterparts with a return of 2.2%. Similarly, global bonds recorded a positive gain of 0.30% driven by increased demand. DOMESTIC According to data from the Nigerian Bureau of Statistics, Nigeria’s economy grew 3.11% y/y in Q1 2022, recording the sixth consecutive quarter of growth. The economic expansion was anchored by the 6.08% y/y growth of the non-oil sector, on the back of increased output across agriculture, manufacturing, telecoms, trade and financial services subsectors. On the other hand, the oil sector contracted for the eight consecutive quarter declining 26% y/y – the worst quarterly performance on record. The sector’s performance continued to be impacted negatively by the low oil production volumes. For context, oil production for the period was 1.49mbpd compared with Q1 2021 – 1.72mbpd. Headline inflation jumped 92 basis point to 16.82% y/y in April (March – 15.90%), the highest rate since August 2021, driven by an increase in both food (+117bps) and core inflation (+27bps) respectively. Food inflation rose to 18.37% y/y on the back higher global food prices due to the Russia-Ukraine tensions and higher transportation cost. Similarly, core inflation rose to 14.18% y/y driven by higher energy prices, rising raw material costs and scarcity of foreign exchange. MACRO ECONOMIC UPDATE FINANCIAL MARKET UPDATE EQUITIES The equities market maintained an upward trend in May consolidating further on the gains recorded the prior month. Market recorded a gain of 8.05% for the month, whilst quarter