FIXED INCOME MARKET
System Liquidity improved today, opening with a balance of ca ₦207.59 billion, higher than previous day’s opening of ca -₦26.14 billion. Thus, the Open Buy Back (OBB) and Overnight (ON) rates trended lower to settle at 10.75% and 11.00% from 16.00% and 15.50% respectively, the previous day.
Activity in the NTB secondary market was bullish today, as market players sought to fill their lost bids at yesterday’s NTB auction. The newest 1yr paper witnessed the most demand, thus, dipping c. 40bps to close at 7.80%. Overall, average rates fell ca 7bps day-on-day. Likewise, the OMO secondary market sustained its bullish theme, with most of the activity skewed to the mid-long dated papers.
The FGN bonds secondary market traded sideways today amid improved offers seen on the mid – long dated maturities. The 35s, 36s and 50s witnessed the most traction at 13.18,% 13.20% and 13.30% respectively, while demand for 23s and 25s remained evident – albeit scarcity of offers ensured trades executed were few and far between. Consequently, the average yield rose by ca 8bps, day-on-day.
Subdued trading activity was witnessed in the Eurobonds secondary market today. Consequently, average yield remained stable, day-on-day.
The domestic bourse closed trading activities on a negative note, as the Nigerian Stock Exchange All Share Index (NSE ASI) lost 0.79% day-on-day, to close at 37,484.82pts, while market year-to-date return receded to -4.43%. This performance leaned heavily to profit taking activities in Guaranty Trust Holding Company Plc (-1.69%), BUA Cement Plc (-5.21%) and Oando Plc (-9.70%).
In the parallel market, the Naira appreciated against the U.S Dollar to ₦520.00/$1.00 from ₦525.00/$1.00, while remaining stable against the Pound Sterling and the Euro at ₦710.00/₤1.00 and ₦600.00/€1.00, respectively. FMDQ Nigerian Autonomous Foreign Exchange Fixing (NAFEX) depreciated to ₦411.67/$1.00 from ₦411.60/$1.00.
Global crude oil prices sustained its northward movement, pushing past $75/per barrel as published reports show a drawback in U.S. crude stockpiles, although concerns about the rapid spread of the Delta variant of Coronavirus still pose a threat to oil price and demand recovery. Thus, Brent Crude oil price rose ca 1.02% day-on-day to settle at $75.50pb, while WTI gained ca 0.98% to $73.10pb, as at report time. Spot Gold rose ca 1.66% day-on-day to $1,829.50 per ounce as at report time.