FINANCIAL MARKETS TODAY – 15 October 2021

The National Bureau of Statistics (NBS) confirmed in its monthly report, the nation’s sixth consecutive month of disinflation, with the Consumer Price Index (CPI), which measures inflation settling at 16.63% year-on-year in September 2021 vs 17.01% recorded in August 2021. This rise in consumer prices at 16.63% , higher than Bloomberg’s estimate of 16.50% is attributable to sustained decline in the prices of food items. The food sub-index declined for the sixth consecutive month, to 19.57% year-on-year from 20.30% year-on-year in August 2021, while the All items less farm produce sub-index rose to 13.74% year-on-year from 13.41% year-on-year in August 2021.

We expect continued disinflation in the near term, due to the high base-effect of last year. 

FIXED INCOME MARKET

Money Markets                                                                                 

Interbank system liquidity opened with a balance of ca ₦168.91 billion, higher than the previous day’s opening balance of ca ₦5.59 billion. Thus, the Open Buy Back (OBB) and Overnight (ON) rates trended higher to settle at 19.50% and 20.00% from 11.00% and 11.25% respectively, the previous day.

Treasury Bills                                                                   

The NTB secondary market was quiet today, with mild demand seen on the October 2022 paper around 6.80% and 6.85%. Overall, average rate remained unchanged at 5.02%.

Bonds  

The FGN bonds secondary was also relatively quiet today. However, some trades were witnessed on the 2036 and 2050 maturities at 12.80% and 13.17% respectively. Overall, average yield dipped ca 3bps day-on-day at 11.33%.

Eurobonds

The Eurobonds space witnessed some bullish sentiments today, with mild demand seen across the yield curve. Overall, the average yield lost ca 1bp day-on-day at 6.38%.

Equities

The Nigerian equities market closed the week with positive performance as the Nigerian Stock Exchange All Share Index (NSE ASI) gained 0.75% day-on-day to close at 41,438.15pts, while year-to-date returns rose to 2.90%. This performance was largely supported by gains in First Bank of Nigeria Holdings Plc (+8.09%), Guaranty Trust Holding Company Plc (+3.86%) and Nigerian Breweries Plc (+1.91%)

The NSE Consumer Goods, Oil and Gas, Industrial Goods and Banking indices gained ca 0.91%, 0.86%, 0.75% and 0.34% respectively, day-on-day.

First Bank of Nigeria  Holdings Plc led both the volume and value charts with ca 476.55 million units traded at ca ₦5.73 billion.

Foreign Exchange

FMDQ Nigerian Autonomous Foreign Exchange Fixing (NAFEX) appreciated to ₦415.07/$1.00 from ₦422.07/$1.00.

Commodities

Global crude oil prices rose today, on reports of increasing global crude oil demand as the International Energy Agency (IEA) iterated that the current energy crunch is expected to boost oil demand by 0.5 million barrels per day (mbpd), which is expected to result in a supply gap of approximately 0.7mbpd through the end of 2021. Thus, Brent Crude oil price gained ca 0.98% day-on-day to settle at US$84.82pb, while WTI also gained ca 0.82% to US$81.96pb, as at report time. Spot Gold lost ca 1.32% day-on-day to settle at US$1,774.10 per ounce as at report time.

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