FINANCIAL MARKETS TODAY – 11 August 2021

FIXED INCOME MARKET
Money Markets

Liquidity in the banking system slipped into a deficit to open at ca -₦117.48 billion, significantly lower than the previous day’s opening of ca ₦133.77 billion. Thus, the Open Buy Back (OBB) and Overnight (ON) rates trended higher to settle at 17.00% and 17.50% from 13.00% and 13.50% respectively, the previous day.

Treasury Bills

The NTB market traded on a muted note today, albeit with a bullish undertone as market players focused on the outcome of the NTB primary market auction. The NTB papers at the mid-long end of the curve witnessed the most traction, though scarcity of offers across the NTB curve ensured trades executed were few and far between. Consequently, the average yield dipped by ca 3bps, day-on-day. However, the OMO secondary market remained largely quiet with yields staying flat across the curve.

Bonds

Activity in the FGN secondary bonds market maintained a bullish theme, as traditional buy side investors continued to cherry-pick the available high yielding securities. Major trading was skewed to the 2027s, 2028s, 2035s, 2036s and 2050s, causing average yields to dip ca 15bps across these papers.

Eurobonds

Activities in the Eurobonds secondary space were bearish today, with selloffs seen across the yield curve. Consequently, average yield rose by ca 2bps, day-on-day.

Equities

The domestic bourse closed the day in positive territory, following buy interest in stocks such as Airtel Africa Plc (+4.90%), Zenith Bank Plc (+0.41%), and Guaranty Trust Holding Company Plc (+0.36%). Thus, the Nigerian Stock Exchange All Share Index (NSE ASI) gained ca 0.69% day-on-day to close at 39,448.46pts, while market year-to-date loss pared to -2.04%.

The NSE Consumer Goods index fell ca 0.02% while the NSE Banking and Oil & Gas indices gained ca 0.45% and 0.08% day-on-day, respectively. The NSE Industrial Goods index closed flat.

Transnational Corporation of Nigeria Plc led the volume chart with c. 20.49 million units, while MTN Nigeria Communications Plc led the value chart by ca ₦777.81 million.

Foreign Exchange

In the parallel market, the Naira depreciated against the U.S Dollar to ₦515.00/$1.00 from ₦510.00/$1.00, while remaining stable against the Pound Sterling and the Euro at ₦703.00/₤1.00 and ₦596.00/€1.00, respectively. FMDQ Nigerian Autonomous Foreign Exchange Fixing (NAFEX) appreciated to ₦411.40/$1.00 from ₦411.50/$1.00.

Commodities

Global crude oil prices reversed some of the previous gains, following reports of the White House reaching out to the Organizational of Petroleum Exporting Countries (OPEC+) and its allies to increase oil production to support the global recovery. The White House had urged OPEC+ to adjust its initial plans to increase global crude oil supply by 400,000 barrels per day, from August through to December 2021 to support demand recovery. Thus, Brent Crude oil price lost ca 0.40% day-on-day to settle at $70.35pb, while WTI fell ca 0.28% to $68.10pb, as at report time. Spot Gold gained ca 0.88% day-on-day to $1,746.90 per ounce as at report time.

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