FIXED INCOME MARKET
Interbank system liquidity began the year with a credit balance of ca ₦252.22 billion, an increase from Friday’s balance of ca ₦16.06 billion. Thus, the Overnight Policy Rate (OPR) and Overnight (ON) rates trended lower to settle at 6.67% and 7.50% from 10.00% and 10.50% respectively.
The NTB secondary market saw a relatively calm session at the start of the week. Despite the slow drag observed across the board, demand was seen on the CBN special bills, with bids at ca 5.80% to 6.00% levels, respectively. Overall, the average rate stayed relatively flat, day-on-day, at 4.33%.
The FGN secondary market started the week on a tepid note, as market players traded cautiously due to a lack of clarity on yield direction. Nevertheless, notable interest was seen across the curve, particularly on the 2024s, 2028s, 2037s, and 2050s at c.9.50%, 12.40%, 13.10%, and 13.28%. Overall, the average yield remained stable, day-on-day, at 11.89%.
The Eurobonds space was bullish, with sustained buy interest seen across board. Overall, the average yield dipped by ca 2bps, day-on-day to 7.18%.
The domestic bourse closed the first trading day of the year on a positive note. The Nigerian Stock Exchange All Share Index (NGX ASI) gained 0.73% day-on-day to close at 43,026.23pts, while year-to-date returns rose to +0.73%. Investors took positions in stocks such as BUA Cement Plc (+7.31%), Stanbic IBTC Holdings Plc (+5.56), and Zenith Bank Plc (+0.60%), respectively.
The NSE Industrial and Banking indices gained ca 2.97% and 0.39% while the NSE Consumer Goods and Oil & Gas indices lost ca 0.92% and 0.50% day-on-day, respectively.
Chams Plc led the volume chart with ca 29.87 million units while Zenith Bank Plc topped the value charts with ca ₦278.22 million worth of trades.
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) appreciated to ₦422.67/US$1.00 from ₦435.00/US$1.00, on Friday.
Global crude prices remained elevated, as the Organization of the Petroleum Exporting Countries and its allies (OPEC+) agree to stick to its planned increase in production output for February on expectations that the Omicron coronavirus variant will have a mild impact on global fuel demand. Thus, Brent Crude oil price rose ca 1.47% day-on-day to settle at US$80.13pb, while WTI also gained ca 1.42% to US$77.15 as at report time. Spot Gold rose ca 0.83% day-on-day to settle at US$1,815.00 per ounce as at report time.