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Capital Market Overview
Economic Overview
Nigeria’s foreign reserves grew by about 22.71% to USD63.00 billion in September 2008 from USD51.34 billion in January 2008 and by 31.44% between September 2007 and September 2008. The primary cause of the decline is the consistent drop in the world price of crude oil which fell from USD88.35 in January to USD48.50 as at November 21st 2008. It actually reached a high of USD145 in July. Nigeria’s situation is further aggravated with disruption in the Niger Delta region of the country. This led to the number of barrels of crude oil produced per day declining from 2.2m bpd in January to about 1.82-m bpd as at the second quarter of the year.
Against the backdrop of the increase in Nigeria’s foreign reserves, the naira remained relatively stable against the USD with an average exchange rate of about NGN129/USD until November and hits NGN/129USD in December.Owing to this factor and other strong fundamental ratios of the country such as continuous growth of the non-oil sector, Fitch maintained a BB-rating for Nigeria while the Local Currency Issuer Default rating (IDRs) were upgraded by international rating agencies from BB- to BB (as at May 2008). ...
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