In normal and volatile times, it is always important to maintain an investment portfolio that is diversified across currencies. We normally recommend that at least 20% of an investor’s portfolio should be in foreign currency. An investor’s objective could be to hedge against a potential devaluation of the Naira or earn real returns on investments, given limited high-yielding local currency investment options. The Legacy USD Bond Fund (LUBF) can assist investors in achieving both goals. The LUBF is a mutual fund registered with the Securities and Exchange Commission, Nigeria. The Fund’s primary objective is to generate stable income over the long term. With a minimum of US$1,318.20, investors will gain exposure to Sovereign and Corporate US Dollar Eurobonds issued by the Nigerian government and Nigerian corporates. Also, once an investment has been made, the investor can monitor the value of the investment by clicking here. Please see Product Focus below for further details.

Inflation and the health care sector

Inflation numbers from the National Bureau of Statistics for October showed the composite consumer price index for health grew significantly, up 23.32% y/y. compared with 17.44% y/y in October 2022. Nigeria’s inflation has been on the rise and while the impact of rising food and utility costs on headline inflation has been extensively discussed, the surging costs of drugs and healthcare services has been overlooked. There has been a consistent and significant rise in the cost of pharmaceutical products, medical services, dental services, paramedical services, and hospital services since the covid -19 pandemic.

Health services in Nigeria are provided by both the public and private sectors. The public sector provides primary, secondary, and tertiary care while the private sector is mainly involved in primary and secondary care. For several years, the Nigerian health care sector has been facing several challenges and is currently both underfunded and understaffed. This is due to a number of factors, including the country's large population and low GDP per capita worsened by the recent Japa syndrome. As a result, many Nigerians do not have access to basic healthcare. The government’s intervention through the Basic Health Care Provision Fund (BHCPF) and the National Health Insurance Scheme (NHIS) has done little to improve access to healthcare.

The scarcity of foreign exchange and the continuous depreciation of the Naira is having an adverse effect on the nation’s health care system. Many pharmaceuticals and medical equipment are imported, and their prices are therefore affected by fluctuations in the exchange rate. This has made many drugs unaffordable for the masses. More so, the cost of research and development of pharmaceuticals has increased significantly making production very expensive. Besides the FX debacle, the rising cost of fuel and energy prices are also contributing to the rise in the cost of pharmaceuticals and healthcare services. Considering the essential nature of health care products and services, the government needs to find effective ways to intervene urgently.

• FX: Last week, the Naira traded at ₦840.04US$ from ₦805.00US$ in the interbank market.
• Bonds: In the secondary market for Federal Government of Nigeria (FGN) bonds, yields increased across most maturities. The yield on the 3-year FGN bond remained unchanged closing at 15.16%, and that on the 30-year FGN bond increased by 112 basis points to 16.91%. Indicative yields on US Dollar Eurobonds issued by Nigerian entities were between 8.39% and 15.01%, depending on maturity.
• Oil:The price of Brent increased by 1.67%, from the previous week’s closing price of US$80.61bbl to US$81.96bbl.
• Equities: Last week, the NGX All-Share Index gained 0.37%. The November 2023 YTD return was 38.75%. The Consumer Goods sector gained 0.24%, on average. UACN gained 12.50%, and CADBURY lost 4.17%. For the Brewers, NB gained 5.26%. The Industrial Goods sector lost 1.18%, on average. BUACEMENT lost 2.80. The NGX Banking sector lost 0.04%, on average ZENITH BANK gained 3.64% and FIDELITY lost 3.83%. In the Agriculture sector, OKOMU gained 1.35%.and PRESCO lost 2.53%.