Macroeconomic Update
Money Markets

Interbank system liquidity improved significantly, to open with a credit balance of ₦309.73 billion, higher than yesterday’s opening balance of ca ₦195.31 billion, as the repayment of OMO maturities worth ca ₦135.90 billion hit the system. Thus, the Overnight Policy Rate (OPR) and Overnight (ON) rates fell to 1.50% and 1.92% from 3.00% and 3.25% respectively, the previous day.

Treasury Bills

The secondary market was dominated by buyside interest across board, with demand centered on CBN special bills, OMO papers, and mid to long-dated NTB maturities, as investors sought to reinvest excess funds from OMO maturities on relatively attractive papers. Overall, the average rate dipped ca11bps day-on-day, closing at 4.20%.

Bonds

The FGN bonds secondary market reflected a bullish theme buoyed by sizeable demand seen across select maturities – 2024s to 2028s, 2036s, 2037s, and 2050s. However, buy-side participants continue to minimize their risk exposures, with most of the trading activity skewed towards the short end of the bond curve. Thus, the average yield reduced by ca 6bps day-on-day, to settle at 11.44%.

Eurobonds

The Nigerian Eurobonds market witnessed an upturn in prices after a 3-day bearish run, with renewed buyside interest across the curve. Overall, the average yield rose by ca 1bp day-on-day to 6.85%. In the interim, we anticipate the market reaction to President Buhari’s request, seeking lawmakers approval for a US$6.14bn (2.6 trillion Naira) supplementary spending plan for petroleum-product subsidies for 2022.

Equities

Trading activity in the domestic bourse was largely tepid amid lackluster buy-side sentiments observed across board. The Nigerian Stock Exchange All Share Index (NGX ASI) was flat today, closing at 47,064.82pts, while year-to-date return remained stable at +10.18%.

The NGX Oil & Gas and Consumer Goods indices were up ca 0.26% and 0.10% respectively, while the NGX Banking and Industrial indices lost ca 1.01% and 0.02% day-on-day.

Access Bank Plc led the volume chart with ca 55.40 million units while Guinness Nigeria Plc topped the value chart with ca ₦1.16 billion worth of trades.

Foreign Exchange

FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) appreciated to ₦416.00/US$1.00 from ₦416.67/US$1.00, the previous day.

Commodities

Global crude oil prices fell from a seven-year high, weighed down by reports that some troops in Russia’s military districts bordering Ukraine are returning to bases, a move that might de-escalate tensions between Moscow and the West. Thus, Brent Crude oil price lost ca 4.10% day-on-day to settle at US$92.52pb, while WTI also dipped by ca 4.46% to US$91.20pb as at report time. Spot Gold lost ca 0.74% day-on-day to settle at US$1,855.40 per ounce as at report time.

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