FIXED INCOME MARKET
Interbank system liquidity improved slightly, albeit still in the negative territory, opening with a deficit balance of ₦209.55 billion, from previous day’s opening balance of ca ₦254.79 billion short. Nonetheless, the Overnight Policy Rate (OPR) trended higher, at 12.38% from 12.33%, while the Overnight (ON) rates dropped to 12.50% from 12.67%, the previous day.
The NTB secondary market was largely bearish, particularly on the mid to long dated maturities, as players sought to create liquidity, but bids were however, scarce. Interest was also seen on the May Special CBN bill, with bids seen at 3.70% levels and improved offers at ca 3.20%. Overall, the average rate stayed relatively flat across the yield curve to settle at 3.17%.
Bearish sentiments dominated the FGN bonds secondary market, with improved offers seen on the 2026, 2028, 2035, 2036, 2037, 2042 and 2050 maturities. Traded volumes were however low due to tight banking system liquidity. Consequently, the average yield rose by ca 6bps across the curve, to settle at 10.70%. We expect bullish sentiments in the near term, on expectation of FAAC inflows and bonds coupon payments.
The SSA curve traded mixed sentiments, with mild sell-offs seen across the Nigerian and Angola curves, as investors look to exit these papers and reinvest in the higher yielding Ghana papers amid renewed confidence in the economy on the back of spending cuts news. Overall, the average yield inched up by ca 8bps across the Nigerian Eurobond curve to settle at 8.12%.
With losses seen in bellwethers such as Guaranty Trust Holding Company Plc (-1.29%) and Zenith Bank Plc (-1.12%), the domestic equities market closed the day in the red, as the Nigerian Stock Exchange All Share Index (NGX ASI) lost ca 0.43% day-on-day to close at 46,961.62pts, while market year-to-date returns dropped to ca +9.94%.
The NGX Banking and Consumer Goods indices lost ca 0.09% and 0.07% respectively, the NGX Oil and Gas index gained ca 0.87%, while the NGX Industrial Goods index traded flat, day-on-day.
Fidelity Bank Plc topped the volume chart with ca 48.26 million units, while Guaranty Trust Holding Company Plc led the value chart with ca 606.92 million worth of trades.
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate appreciated to ₦416.00/US$1.00 from ₦417.00/US$1.00, the previous day.
Global crude oil prices saw a volatile trading session today, on the likelihood of a new supply of global crude oil in the current tight oil market, amid prospects of a new Iran deal. Thus, Brent Crude Oil price lost ca 1.04% day-on-day to settle at US$120.33pb, while WTI also lost ca 0.74% day-on-day to US$114.13pb as at report time. Spot Gold gained ca 1.37% day-on-day to settle at US$1,964.00 per ounce as at report time.