FIXED INCOME MARKET
Interbank system liquidity opened higher today with a balance of ca ₦135.87billion (buoyed by OMO maturity of ₦60billion), representing a ₦ 60.63 billion increase from yesterday’s opening balance. Thus, the Overnight Policy Rate (OPR) and Overnight (ON) rate declined to 9.67% and 10.33% respectively, from 12.83% and 13.67% recorded at yesterday’s session.
The NTB secondary market witnessed demand on 8 Aug CBN SPEB and 25 May 2023 paper at 3.50% and 6.30% respectively, while offers were seen at 3.30% and 5.75%. Overall, the average rate declined slightly by c.3bps, closing at 3.78%, as the wide bid/ask spreads ensured very few trades were consummated.
The FGN Bonds secondary market sustained its bullish theme, with interest skewed towards the short-term maturities (2025s to 2029s), 2036s, 2042s and 2050s. Consequently, the average yield dipped by ca.8bps across the curve, to settle at 11.65%.
Following yesterday’s hawkish comments by the Fed Governor, Christopher Waller, showing a strong support for further policy tightening by hiking 50bps in subsequent meetings, the Eurobond market traded with a bearish bias in today’s session. In addition, subtle global growth fears that have weighed on investors’ minds alongside May’22 Euro area inflation printing at 8.10% (vs 7.40% in April 2022), all drove the bearish theme. Nigeria, Ghana and Angola all retraced the bullish theme experienced in the past few days, as offshore investors de-risk their exposures in the SSA market. Overall, the average mid-yield settled at 9.77%.
In other news, Ghana plans to raise a US$2bn syndicated loan in 2 equal tranches before mid-July 2022.
The domestic bourse sustained its negative performance as the benchmark index slid 0.25% day-on-day to close at 53,637.14pts following sell pressure on NB (-9.96%), and Zenith Bank Plc (-1.68%); thus YTD return trimmed to 24.05%. The persistent bearish trend is closely tied to sustained rounds of profit taking following significant gains recorded in prior months.
The NGX Oil & Gas Index gained 0.05% while the NGX Consumer Goods, Industrial, and Banking Indices lost ca 1.78%, 0.16%, and 0.15% day-on-day, respectively. Transcorp Corporation of Nigeria led the volume chart with ca 86.74 million units while MTN Nigeria Communications PLC topped the value charts with ca ₦ 1.64billion worth of trades.
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate appreciated in value to ₦419.50/US$1.00 from ₦420.25/US$1.00, recorded the previous day
Global crude oil prices continued to rise today, after the European Union Leaders reached an agreement late yesterday to ban 90% of Russian crude by the end of the year. Brent Crude Oil price gained ca 1.93% day-on-day to settle at US$122.76pb, while WTI also rose ca 2.65% day-on-day to settle at US$118.11pb as at report time. Spot Gold lost ca 0.68% day-on-day to close at US$1,838.80 per ounce as at report time