FIXED INCOME MARKET
Interbank system liquidity printed lower at ₦87.17 billion compared to ₦149.69 billion recorded yesterday, due to NTB auction debits. Nonetheless, Overnight Policy Rate (OPR) and Overnight (ON) rate declined to 6.50% and 6.50% respectively amid expected retail FX refunds, compared to 7.50% and 8.33% reported at yesterday’s session.
The NTB market witnessed buy-side interest on the long-end of the curve, particularly on the newly issued 1-year (8 June 2023) paper, as market players tried to fill lost bids following the decline in stop rates at yesterday’s auction. Most trades were executed at 5.90% to 6.00% levels, thus, average rate declined by 7bps closing at 3.81%.
The FGN bonds market trade on a calm note, with few interests recorded on 2025s, 2026s, 2032s and 2042s papers. Overall, average yield declined by 5bps to 11.41% at the close of the trading session.
The SSA Eurobond markets traded with bearish sentiments amid limited buy-side purchasing pressure. Investors stayed cautious, as focus was on some critical market indicators/releases such as today’s ECB event for any rate hike hints for July 2022 and onward, the US CPI data release tomorrow and news that part of Shanghai is back into lockdown.
The equities market closed the session on a bearish note as the ASI lost 0.04% from the previous session, closing at 53,170.73pts. Selling sentiment on bellwethers such as Zenith Bank ( -2.35%), United Bank of Africa (-1.28%) and Nigerian Breweries ( -1.10%) were the major drags to performance while year-to-date returns was recorded at +24.47%.
The NGX Industrial Goods, Oil & Gas and Consumer Goods Indices all gained c.013%, 0.46% & 0.13% respectively while the NGX Banking Index lost c. 1.20% from the previous session. Transnational Corporation of Nigeria (TRANSCORP) continued to lead the volume chart with c.165.21 million units while NESTLE led the value charts with c.₦ 678.54 million worth of trades.
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate depreciated to ₦422.25/US $1.00 from ₦420.25/US$1.00, recorded at the previous session.
Oil prices dipped slightly today but still hovered near three-month highs after parts of Shanghai imposed new Covid-19 lockdown measures although China’s stronger-than-expected exports in May offered a boost to the demand outlook. Overall, Brent Crude Oil price gained c.0.12% to settle at US$123.73pb while the WTI lost c.0.09% from the previous session to settle at US$121.97pb as at report time. Spot Gold lost c.0.59% to close at US$1,845.60 per ounce as at report time.