FIXED INCOME MARKET
Interbank system liquidity opened the day with a credit balance of ca ₦166.22 billion, lower than the previous day’s opening balance of ca ₦190.81 billion. Nonetheless, the Overnight Policy Rate (OPR) and Overnight (ON) rates trended lower to settle at 5.25% and 5.63% from 7.67% and 8.25%, recorded yesterday.
The NTB secondary market endured another quiet session, as attention remained drawn to tomorrow’s NTB auction (the first for Q2’2022). However, sideways interests were observed on May CBN Special bills and March 2023 NTB papers while offers were largely seen for January and February 2023 maturities. Overall, the average rate rose ca 5bps, day-on-day at 3.29%.
The FGN bonds market traded on a mixed to bearish note, with investors cherry-picking select maturities across the curve. Notable sell-offs were also seen on 2026s, 2035s, 2036s, and 2050s, with the belly of the curve witnessing the most action. Overall, the average yield inched up ca 8bps, day-on-day at 10.99%.
The SSA Eurobonds market witnessed sell-offs, with the long end Nigeria sovereign papers hitting 10.18% levels, as global risk-off sentiment dominated the curve amid U.S. inflation data release. Overall, the average yield settled at 8.16%.
With US’ CPI printing at 8.50% (a 60bp increase from Feb’s 7.90% ) in line with market’s expectation, this bearish sentiment is expected to persist, thus bolstering the possibility of the Feds hiking by c.50bps at their next meeting in May 2022.
The domestic bourse sustained its positive performance, as the Nigerian Stock Exchange All Share Index (NGX ASI) gained 0.72% day-on-day to close at 47,205.03pts, while year-to-date returns extended to +10.51%. This performance leaned heavily to bargain hunting on stocks like Zenith Bank Plc (+5.83), Access Holdings Plc (+4.00%), Guaranty Trust Holding Company Plc (+3.05%), and MTN Nigeria Communications Plc (+1.25%), respectively.
The NGX Banking, Consumer Goods, Oil & Gas, and Industrial indices gained ca 2.77%, 1.94%, 1.71%, and 0.10%, day-on-day, respectively.
Guaranty Trust Holding Company Plc led the volume chart with ca 39.09 million units while Seplat Energy Plc topped the value charts with ca ₦984.84 million worth of trades.
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate appreciated to ₦416.63/US$1.00 from ₦417.00/US$1.00, printed the previous day.
Global crude oil prices rose today, as Shanghai eased most COVID-19 restrictions, alleviating concerns over Chinese demand. Another cause for the upward price movement was OPEC’s warning that sanctions would make it nearly impossible to replace 7 million barrels per day (bpd) of Russian oil and other liquids supplies– a signal for an interim tight supply.
Thus, Brent Crude Oil price inched up by ca 6.87% day-on-day to settle at US$105.25pb, while WTI also rose ca 6.97% day-on-day to settle at US$100.86pb as at report time. Spot Gold gained ca 1.53% day-on-day to close at US$1,978.00 per ounce as at report time.