FIXED INCOME MARKET
Opening Interbank system liquidity improved significantly to ₦259.73billion from ₦ 87.17 billion recorded yesterday, due to late Retail FX auction refunds. However, today’s Retail FX intervention provisioning caused the Overnight Policy Rate (OPR) and Overnight (ON) rate to spike to double-digit levels at 13.75% and 14.00% respectively, from 6.50% and 6.50% reported at yesterday’s session.
The Treasury bills market closed the week on a mixed to bearish note, amid mild demand on May 2023 OMO papers while offers were seen on the April 2023 NTBs and 08-June-2023 paper at c.5.90%. Thus, average rate inched up marginally by 3bps to close at 3.84%.
The FGN bonds market witnessed sideways trading, as mild buying interest was seen on 2034s, 2042s and 2050s papers while offers were observed on the 2025s and 2035s papers. Overall, average yield dipped by c.6bps to 11.35% at the close of today’s session.
The Eurobond market sustained its bearish theme following yesterday’s hawkish tone by the ECB, suggesting a 25bp rate hike in July 2022 and further hike in September 2022. Offshore investors continue to de-risk their exposures in the SSA and North African papers, causing a decline of c.2.20pts across the curve. The selloff was also aggravated by the latest US CPI result, which printed higher than market expectation at 8.60%.
The equities market reversed its bearish trend at the close of the week, as the ASI appreciated by 0.06% from the previous session, closing at 53,201.38pts. Today’s market performance was boosted by buying interests on Transnational Corporation of Nigeria (TRANSCORP) (+4.55%), FBN Holdings (+2.43%) and Access Corporation (+0.51%) while year-to-date returns stands at +24.55%.
The NGX Banking and Consumer Goods indices both gained c.0.06% & 0.02% respectively, the NGX Industrial Goods index remained unchanged from the previous day while the NGX Oil & Gas Index lost c.0.46% from the previous session. Transnational Corporation of Nigeria (TRANSCORP) continued to lead the volume chart with c.103.42 million units while GTCO led the value charts with c.₦ 393.92 million worth of trades.
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate appreciated slightly to ₦421.25/US $1.00 from ₦422.25/US$1.00, recorded at the previous session.
Oil prices slipped today as China imposed new Covid-19 lockdown measures and U.S. consumer prices rose more than expected, but crude prices remained on track for another weekly gain due to solid demand for fuels in the United States. Overall, Brent Crude Oil price lost c.1.58% to settle at US$121.15pb as the WTI lost c.1.53% from the previous session to settle at US$119.65pb as at report time. Spot Gold also lost c.0.11% to close at US$1,850.80 per ounce as at report time.