FIXED INCOME MARKET
Opening system liquidity declined significantly by c.₦234.23 billion from yesterday’s figure to print at ₦283.71 billion, following another round of CRR debits. Consequently, the Overnight Policy Rate (OPR) and Overnight (ON) rate inched up to 6.67% and 7.00% respectively from 6.00% and 6.17% recorded at yesterday’s session.
The Treasury Bills secondary market closed the week with mixed sentiments. Offers were seen on Sept to Nov 2022 Bills at 3.50% to 3.85% levels, while mild demand was observed on Apr and May 2023 Bills, as market participants positioned ahead of the NTB Auction scheduled to hold next week. At the close of the session, average rate declined slightly by c.3bps to settle at 3.88%.
The FGN Bonds secondary market witnessed a slight uptick in yield on 2027s at 10.70%, while demand was seen on 2025s and 2026s at 10.15% and 10.35% respectively. Overall, average yield dipped by c.6bps to 11.56% at the close of the trading session.
The Eurobond space ended the week with little to no activity recorded across the SSA, North and East African markets, due to the UK holiday. We expect activity to resume fully on Monday.
The equities market reversed its negative trend, as the ASI Index inched up by 0.13% day-on-day to close at 52,908.24pts. Buying interest was seen on bellwethers such as Nigeria Breweries(+7.06%) and Zenith Bank Nigeria (+1.96%) while the index improved to +23.86% YTD.
The NGX Consumer Goods, Banking and Oil & Gas Indices all gained by c.1.05%, 0.95% and 0.53% respectively while the NGX Industrial goods index declined slightly by c.0.01% day-on-day. UAC Nigeria led both the volume charts and the value charts with c.73.89 million units and ₦ 812.90 million worth of trades respectively.
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate depreciated to N 419.75/US $1.00 from ₦419.00/US$1.00, recorded at the previous session.
Oil prices continued to rise today, supported by expectations that OPEC’s decision to increase production targets by slightly more than planned will have little impact on global supply especially as demand from China increases following an easing of COVID restrictions. Thus, Brent Crude Oil price gained c.1.19% day-on-day to settle at US$119.00pb, as the WTI also rose c.1.40% day-on-day to settle at US$118.51pb as at report time. Spot Gold lost c.0.48% day-on-day to close at US$1,862.40 per ounce as at report time.