FIXED INCOME MARKET
Interbank system liquidity improved today, with a credit balance of ca ₦464.16 billion, compared to the previous day’s opening balance of ca ₦298.42 billion. Nonetheless, the Overnight Policy Rate (OPR) and Overnight (ON) rates trended higher to settle at 4.83% and 5.17% from 4.75% and 5.00%, respectively.
The NTB secondary market had another quiet session as the auction blues ensured tepid activity across board. However, few offers were seen at the long end of the curve, particularly for the February and March 2023 NTB papers at 3.80% levels, while bids hovered around 3.95%. Overall, the average rates stayed relatively flat, day-on-day to settle at 3.26%.
The FGN Bonds secondary market witnessed sideways interest across select maturities. The 2026s, 2028s, 2036s, and 2042s continue to see the most traction, but offers were few spreads short of target levels, thus traded volumes remain relatively low. Overall, the average yield dipped marginally by 2bps, day-on-day to close at 10.41%.
The SSA Sovereign Eurobonds space saw modest correction across select SSA papers (Nigeria, Ghana, and Angola), with buy-side action seen across the curve. The rally was driven by the anticipated outcome of the U.S. Federal Reserve interest rate decision, and as Ukraine/Russia talks show signs of reassurance. Consequently, the average yield settled at 7.63%.Consequently, the average yield settled at 7.63%.
The domestic bourse observed renewed interest, to close the day in the green as the Nigerian Stock Exchange All Share Index (NGX ASI) gained ca 0.05% day-on-day to close at 47,340.86pts, while market year-to-date returns extended to ca +10.88%. This performance was largely due to the keen interest in stocks such as First Bank of Nigeria Holdings Plc (+1.29%), Stanbic IBTC Plc (+0.87%), and MTN Nigeria Communications Plc (+0.24%).
The NGX Consumer Goods index gained ca 0.19%, the NGX Banking index lost ca 0.59%, while the NGX Oil & Gas and Industrial indices closed flat, day-on-day.
United Bank for Africa Plc led the volume chart with ca 14.76 million units while MTN Nigeria Communications Plc topped the value chart with ca ₦458.93 million worth of trades.
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate remained stable at ₦416.50/US$1.00.
Global crude oil prices steadily declined, due to progress in Russia-Ukraine peace talks and the release of the International Energy Agency’s monthly report, which lowered its forecast of global crude demand for 2022. Thus, Brent Crude Oil price lost ca 0.71% day-on-day to settle at US$99.24pb, while WTI also gained ca 0.28% to US$96.68pb as at report time. Spot Gold lost ca 0.93% day-on-day to settle at US$1,911.70 per ounce as at report time.