FIXED INCOME MARKET
Interbank system liquidity further tightened today, opening with a deficit balance of – ₦328.81 billion, lower than previous day’s opening of ca – ₦85.96 billion, due to the FGN bond suction settlement that took place today. As a result, the Overnight Policy Rate (OPR) and Overnight (ON) rates trended higher to 14.00% and 14.13% from 13.83% and 14.00% respectively, due to funding provision for today’s bond auction settlement.
The NTB market traded on a mixed note, with mild demand skewed to the 29 August 2022 CBN special bill at 5.40%, while sell activity was observed on 8 June 2023 NTB at 5.90% levels. Overall, average rate inched up by c.5bps, day-on-day to 4.49%.
The FGN bonds secondary market traded sideways today with buying interest seen on 2035s, 2042s, and 2050s while slightly improved offers were observed on 2028s and 2032s. Consequently, the average yield dipped by ca 7bps, day-on-day across the curve, to settle at 11.49%.
Following the release of UK’s CPI at 9.10% and lower oil prices amid global recession fears, the Eurobond space endured a bearish theme. The SSA and other African sovereign papers saw some selloffs across the curve, particularly in oil-producing countries such as Angola and Nigeria. Overall, the average yield across the Nigeria sovereign curve settled at 14.61%.
The domestic bourse ended trading activities on a positive note, with the market’s year-to-date returns positioned at ca +20.28%. The Nigerian Stock Exchange All Share Index (NGX ASI) gained 0.56% day-on-day, to close at 51,377.21pts, with buy interests observed on bellwethers like Dangote Cement Plc (+1.85%), MTN Nigeria Communications Plc (+0.91), and Access Holdings Plc (+0.53%), respectively.
The NGX Consumer Goods Index gained ca 0.41% while the NGX Banking, Industrial, and Oil & Gas Indices lost 0.61%, 0.28% and 0.19% day-on-day, respectively.
Oando Plc led the volume chart with ca 34.46 million units while MTN Nigeria Communications Plc topped the value charts with ca ₦565.62 million worth of trades.
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate depreciated to ₦420.50/US$1.00 from ₦420.28/US$1.00, recorded the previous day.
Global crude oil prices fell due to an attempt by U.S. President Joe Biden to lower fuel taxes to reduce costs for drivers, amid strained relations between the White House and the U.S. oil industry. Brent Crude Oil price lost ca 2.70% day-on-day to settle at US$111.55pb, while WTI also dipped ca 2.95% day-on-day to settle at US$106.29pb as at report time. Spot Gold gained ca 0.08% day-on-day to close at US$1,840.20 per ounce as at report time.