FINANCIAL MARKETS TODAY – 28 July 2021

FIXED INCOME MARKET
Money Markets

Liquidity in the banking system slipped into a deficit to open at ca -₦26.14 billion, lower than the previous day’s opening balance of ca ₦9.08 billion. Consequently, Open Buy Back (OBB) trended higher to close at 16.00% from 15.75% while the Overnight (ON) declined by 75bps to close at 15.50%.

Treasury Bills

The NTB secondary market witnessed subdued trading activities today, as market players shifted focus to the NTB Primary Market Auction (PMA) auction. Few offers were seen for the Jul’22 papers at c. 8.10%, hence, a sparse number of trades were executed. Thus, the average rate remained stable day-on-day. Conversely, the Open Market Operation (OMO) secondary market maintained a bullish theme, with demand seen across the mid-long end of the curve, particularly for the Jan’22 and Mar’22 maturities at 8.20% levels.

Bonds

Trading in the FGN bonds market was mixed to slightly bearish today, with pockets of trade witnessed across the yield curve. The short tenors saw slight demand while improved offers at the mid – long end of the curve spurred interest on the 2035s, 2036s and 2050s at c.13.16%,13.18%, and 13.30% respectively.

Eurobonds

The Eurobonds space saw bearish sentiments, with sell-side activity seen across the yield curve. Consequently, average yield rose by ca 3bps, day-on-day.

Equities

The domestic bourse closed the day in the red today, as the Nigerian Stock Exchange All Share Index (NSE ASI) lost 0.03% day-on-day to close at 38,791.03pts while market year-to-date loss rose to -3.67%. This was largely due to price depreciation in Zenith Bank Plc (-1.61%) and Access Bank Plc (-1.06%).

Foreign Exchange

In the parallel market, the Naira depreciated against the U.S Dollar, Pound Sterling and Euro to ₦522.00/$1.00, ₦710.00/₤1.00 and ₦600.00/€1.00 from ₦505.00/$1.00, ₦703.00/₤1.00 and ₦592.00/€1.00 respectively, day-on-day. FMDQ Nigerian Autonomous Foreign Exchange Fixing (NAFEX) appreciated to ₦411.60/$1.00 from ₦411.67/$1.00.

Commodities

Global crude oil prices rose today, reversing its bearish trend on the back of data published by the American Petroleum Institute (API) which showed a drop in U.S. crude stockpiles by ca 4.7 million barrels against the market’s expectation of a 2.9 million barrels drop in crude stockpiles. The recent reports spurred investors’ optimism of a demand recovery despite concerns about the surge in Coronavirus cases. Thus, Brent Crude oil price rose ca 0.36% day-on-day to settle at $74.75pb, while WTI gained ca 0.73% to $72.19pb, as at report time. Spot Gold fell ca 0.04% day-on-day to $1,799.10 per ounce as at report time.

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