FIXED INCOME MARKET
In the absence of official liquidity figures, Interbank system liquidity was estimated at c. ₦18bn long, after factoring the NTB auction settlement that took place today. The Overnight Policy Rate (OPR) increased by 5bps to settle at 13.88% while the Overnight Rate (O/N) held steady at 14.00%.
The Treasury bills secondary market had another quiet session, albeit with a mixed to bearish theme. Banks offered short-dated papers to raise liquidity while some retail interest was seen on the newly issued 1-year paper at 6.95% but offers were at 6.30% levels. Overall, the average rate inched up by 4bps day-on-day, to close at 6.95%.
The FGN Bonds secondary market endured a bearish theme, as players continue to take position ahead of Monday’s FGN bond auction. Offers were predominantly seen on 2025s, 2032s, 2042s, and 2050s at 10.30%, 12.55%, 13.17%, and 13.15% respectively, but bids were scanty. Overall, the average yield inched up by 7bps day-on-day to settle at 11.74%.
The SSA and other African Eurobonds traded bearish, as offshore investors alongside some locals exited their exposures and repriced risk assets much lower, ensuring an average drop of 6 points across the curve. We believe investors are currently pricing a potential 100bps increase in benchmark interest rate at the next FED meeting. Overall, the average yield across the Nigerian sovereign curve settled at 14.67%.
The domestic bourse recorded a bearish session today, as the Nigerian Stock Exchange All Share Index (NGX ASI) lost 0.10% day-on-day to close at 51,338.27pts, while year-to-date returns dipped to ca +20.18%. Sell pressures were observed on stocks like International Breweries Plc (-5.17%), Zenith Bank Plc (-1.56%), and Access Holdings Plc (-0.54%), respectively.
The NGX Consumer Goods, Banking and Industrial indices lost ca 0.93%, 0.67%, and 0.02% day-on-day, respectively. The NGX Oil & Gas Index closed flat.
Transcorp Corporation of Nigeria Plc led the volume chart with ca 12.81 million units while Zenith Bank Plc topped the value charts with ca ₦148.27 million worth of trades.
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate slightly depreciated to ₦424.63/US$1.00 from ₦424.58/US$1.00, recorded the previous day.
Global crude oil prices declined today, as investor sentiments weighed heavily on the possibility of a rate rise in the United States, which could curb inflation, but also have an impact on oil demand. Brent Crude Oil price lost ca 2.38% day-on-day to settle at US$97.20pb, while WTI dipped ca 2.99% day-on-day to settle at US$93.42pb as at report time. Spot Gold lost ca 1.72% day-on-day to close at US$1,705.60 per ounce as at report time.