FIXED INCOME MARKET
Interbank system liquidity tapered today, opening with a balance of ca ₦326.39 billion, lower than the previous day’s opening balance of ca ₦464.16 billion. The money market rates moved in opposite directions as the Overnight Policy Rate (OPR) dipped 8bps to settle at 4.75%, while the Overnight (ON) rates trended higher to close at 5.25%.
The NTB secondary market saw few trades executed on the March 2023 papers following yesterday’s auction as investors attempted to fill lost bids. Most of the deals on the newly issued 1-year NTB paper were executed at 3.90% levels. Overall, the average rates dipped ca 6bps, day-on-day to settle at 3.25%.
The FGN Bonds secondary market was dominated with bullish sentiments, with the 2042 maturity garnering the most traction. The 2026s, 2027s, and 2050s also witnessed modest buy-side action at 10.15%, 10.22%, and 12.80%, respectively. Overall, the average yield dipped by 8bps, day-on-day to close at 10.53%.
The Nigerian government announced intentions to sell a $1 billion worth of 7-year Eurobond (Mar 2029) at an Initial Price Target of 8.00% to 8.70%, with the proceeds going toward financing the gasoline subsidy deficit. The market is expected to trade in a mixed to bearish theme, since the prospect of increased supply should lead to improved yield levels.
The SSA Sovereign Eurobonds space observed major recovery across board, as investors risk appetite surged in response to China’s pledged initiatives to support financial markets and economic growth, along with talks of a cease-fire accord between Ukraine and Russia. Consequently, the average yield settled at 8.05%.
The domestic bourse erased some of the previous day’s gains, as the Nigerian Stock Exchange All Share Index (NGX ASI) marginally lost ca 0.02% day-on-day to close at 47,353.22pts, while market year-to-date returns trimmed to ca +10.85%. Profit-taking activities were seen in stocks like Seplat Energy Plc (-3.13%) and Nigeria Breweries Plc (-1.98%).
The NGX Banking Index gained ca 0.01% while NGX Oil & Gas and Consumer Goods indices lost ca 1.76% and 0.45%, day-on-day, respectively. The NGX Industrial Index closed flat.
Veritas Kapital Assurance Plc led the volume chart with ca 30.01 million units while MTN Nigeria Communications Plc topped the value chart with ca ₦961.43 million worth of trades.
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate depreciated to ₦416.67/US$1.00 from ₦416.50/US$1.00, the previous day.
Global crude oil prices surged today due to concerns of an anticipated supply loss after the International Energy Agency (IEA) stated three million barrels per day (BPD) of Russian oil and products might be shut down starting next month. Thus, Brent Crude Oil price rose ca 7.77% day-on-day to settle at US$105.64pb, while WTI also gained ca 7.14% to US$101.83pb as at report time. Spot Gold gained ca 2.06% day-on-day to settle at US$1,948.60 per ounce as at report time.