FINANCIAL MARKETS TODAY – 05 January 2022

FIXED INCOME MARKET
Money Markets

Interbank system liquidity improved today, opening with a credit balance of ca ₦274.55 billion, an increase from yesterday’s balance of ca ₦252.22 billion. Thus, the Overnight Policy Rate (OPR) and Overnight (ON) rates trended lower to settle at 4.50% and 5.25% from 6.67% and 7.50% respectively.

Treasury Bills

The NTB secondary market traded on a bullish note today, with major demand seen on the CBN’s special bills, notably the February to May 2022 papers at 5.60% levels. The NTBs papers gathered little to no interest from investors despite the upcoming auction slated for next week. Overall, the average rates dipped ca 7bps, day-on-day, at 4.40%.

Bonds

Bullish sentiments dominated the FGN secondary market today, with buy interest seen on the long-dated maturities – 2036s, 2037s, and 2050s. The 2050 maturity witnessed the most traction, losing ca 5bps to settle at 13.17% at the close of today’s trading session. Overall, the average yield dipped ca 6bps, day-on-day, at 11.89%.

Eurobonds

The Eurobonds space traded quietly today, with minimal activity observed across the sovereign curve. Overall, the average yield stayed stable, day-on-day, to 7.19%.

Equities

The domestic bourse closed the day in the green, as the Nigerian Stock Exchange All Share Index (NGX ASI) gained 1.05% day-on-day to close at 43,476.75pts, while year-to-date returns extended to +1.78%. This is largely due to positive sentiments towards bellwethers such as Airtel Africa Plc (+10.00%), Access Bank Plc (+1.08%), alongside the newly listed stock on the exchange, BUA Foods Plc (+10.00%).

The NSE Oil & Gas Index gained ca 3.12% while the NSE Industrial, Banking, and Consumer Goods indices lost ca 2.42%, 0.50% and 0.02% day-on-day, respectively.

BUA Foods Plc topped both the volume and value charts with ca 1.01 billion units traded at ca ₦40.53 million.

Foreign Exchange

FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) appreciated to ₦416.00/US$1.00 from ₦422.67/US$1.00, the previous day.

Commodities

Global crude prices rallied above US$80/barrel, on the back of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) decision to expand crude production output by an additional 400,000 barrels per day starting February 2022. Thus, Brent Crude oil price rose ca 1.71% day-on-day to settle at US$81.37pb, while WTI also gained ca 1.95% to US$78.49 as at report time. Spot Gold rose ca 0.55% day-on-day to settle at US$1,823.80 per ounce as at report time.

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