FINANCIAL MARKETS TODAY – 13 January 2022

FIXED INCOME MARKET

Money Markets                                                                                

Interbank system liquidity slipped into negative territory for the second time this week, opening with a deficit balance of ca ₦76.41 billion, lower than previous day’s opening balance of ca ₦47.41 billion. Nonetheless, the Overnight Policy Rate (OPR) and Overnight (ON) rates trended lower to settle at 13.50% and 14.25% from 15.00% and 15.75% respectively.

Treasury Bills                               

The NTB secondary market opened with improved offers across the mid to long end of the curve, particularly the newly issued 1-yr paper which was offered at 5.10%, however bids were around 5.30% to 5.40%. The CBN Special bills also witnessed improved offers, as most players were on the sell side in reaction to the 60bps hike in 1-yr NTB paper at yesterday’s auction. Thus, average rates inched up by 10bps at 4.26%.

Bonds  

The FGN bonds secondary market traded with mixed sentiments, following the release of Q1 2022 FGN bonds issuance calendar, where the 2026s will be on offer alongside a newly issued bond, 2042. Offers on the 2026 maturity improved by ca 9bps as investors anticipated supply at next week’s FGN bond auction. There was also notable interest on 2023, 2027, 2028 and 2050  maturities. However, volumes executed remained unimpressive. Overall, average yield inched up 7bps, day-on-day to 11.54%.

Eurobonds

The Eurobonds secondary market also traded with mixed sentiments today, with demand seen at the short-end of the curve, while sell-offs were witnessed on the mid to long dated maturities. Overall, the average yield reduced by ca 1bp day-on-day, at 7.58%.

Equities

The domestic bourse closed the day in the red, as the Nigerian Stock Exchange All Share Index (NGX ASI) lost 0.01% day-on-day to settle at 44,604.74pts, while year-to-date returns settled at +4.42%. This performance was largely due to sell-offs in stocks such as and Custodian Investment Plc (-9.49%) and Stanbic IBTC Bank Plc (-0.08%).

The NSE Consumer Goods and Banking indices gained ca 0.16% and 0.07% respectively, while the NSE Industrial Goods and Oil and Gas indices remained flat, day-on-day.

Transnational Corporation of Nigeria Plc led the volume chart with ca 104.58 million units, while Seplat Petroleum Development Company Plc topped the value chart with ca ₦920.64 billion.

Foreign Exchange

FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) depreciated to ₦416.50/US$1.00, from ₦416.00/US$1.00 the previous day.

Commodities

Global crude oil prices hung on to gains today, despite the U.S Energy Information Administration (EIA) reporting a rise in gasoline stockpiles by 8 million barrels, higher than analysts’ expectation of a 2.4 million barrels rise. Thus, Brent Crude oil price gained ca 0.37% day-on-day to settle at US$84.98pb, while WTI also gained ca 0.15% to US$82.76 as at report time. Spot Gold lost ca 0.44% day-on-day to settle at US$1,819.30per ounce as at report time.

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