What Would Meffy Do?
4 Customs Street: 26 Sep 2022
Good Morning 😃
How are you doing?
Welcome to this week’s edition of 4 Customs Street, our weekly newsletter on the stock market.
The newsletter is divided into two:
Green White Green—focused on the Nigerian stock market.
Star-Spangled Banner—focused on the US stock market.
Green White Green Last Week
Access Holdings (parent company of Access Bank) has received final approval for its payment subsidiary, Hydrogen Payment Services Company Limited, from the Central Bank of Nigeria. Hydrogen will provide switching and payment processing services to financial service providers and other parties.
Green White Green This Week
This week, the Central Bank of Nigeria (CBN) will be holding a Monetary Policy Committee (MPC) meeting this week. After the meeting, the CBN Governor, Godwin Emefiele (nicknamed "Meffy"), will announce decisions taking on the interest rate, as well as any key policies pertaining to banks.
The last MPC meeting was pretty mundane but with FX pressures mounting in the country, no one knows what to expect this week.
Banks drive a lot of trading on the Nigerian stock market. So, positive news for them is good for the market and vice versa.
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Star-Spangled Banner Last Week
The losses are getting “werser and werser.” The S&P 500 fell by 4.7%. Many tech stocks in particular were hit hard and are trading at or around their lowest prices for the year.
Last week, the US Fed (central bank) increased interest rates by 0.75%. That was expected. Fed Chief, Jerome Powell, however, indicated the Fed would continue to raise interest rates till it hits 4.6% in 2023.
This message resulted in stocks spinning, because stocks and fixed income investments like treasury bills and bonds are on opposite sides. Higher return on fixed income investments leads to people moving money to those investments. Higher rates also mean borrowing becomes more expensive.
Star-Spangled Banner This Week
It is a rather quiet week in terms of earnings. Three key events will be held.
Nike will drop its latest quarterly earnings. One of the biggest headaches for that company, aside from the frequent lockdowns in China, is the foreign exchange differences. As the dollar becomes “stronger,” it translates into smaller earnings from other countries.
Amazon and Tesla will be holding events during the week to showcase their AI products and updates to the self-driving cars respectively.
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