FIXED INCOME MARKET
Interbank system liquidity opened lower with a deficit balance of ca ₦223.57 billion due to the NTB auction settlement, compared to yesterday’s opening balance of ca ₦159.92 billion short. Nonetheless, the Overnight Policy Rate (OPR) trended lower to 14.67% from 15.00% recorded in the previous session, while the Overnight Rate (O/N) remained unchanged at 15.00%.
The NTB secondary market observed a lull session with a bearish undertone due to yesterday’s auction results. Bids on the newly issued 1-year paper were at ca 8.40% levels, while offers were pegged at 8.00%. Overall, the average rate closed 13bps higher, settling at 7.78%.
The FGN bonds market also experienced choppy activity, with selling pressure witnessed across 2025s, 2026s, 2027s, 2035s and 2036s, while few demand was recorded across 2042s and 2050s, though wide bid/ask spreads ensured weak volumes were traded. Consequently, average yield closed relatively flat to settle at 13.10%.
The 2022 Jackson Hole symposium has been the main event, with market players keeping close tabs on the US Fed speakers for insights on inflation outlook and rate hike trajectory. In the African Eurobond markets, there were a few buyers of Nigeria front end, entire Angola curve and Ghana bellies, while sellers continue to offer mid dated Nigeria papers and the entire Egypt curve. Overall, the average yield across the Nigerian sovereign curve settled at 11.49%.
The domestic bourse closed the day on a positive note, as the Nigerian Stock Exchange All Share Index (NGX ASI) gained 2.03% day-on-day to settle at 49,661.87pts, while year-to-date return extended to +16.26%. Buy interest was seen in stocks such as Airtel Africa Plc (+7.06%), BUA Foods Plc (+3.33%), and Nestle Nigeria Plc (+0.34%), respectively.
The NGX Industrial Index shed ca 0.01% while the NGX Consumer Goods, Oil & Gas, Banking Indices gained ca 0.77%, 0.65%, and 0.19%, day-on-day, respectively.
Mutual Benefits Assurance Plc led the volume chart with ca 74.54 million units while MTN Nigeria Communications Plc topped the value charts with ca ₦505.04 million worth of trades.
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate appreciated to ₦430.67/US$1.00 from ₦431.00/US$1.00, recorded the previous day.
Global Oil prices steadied on the back of the recent drop in U.S. crude stockpiles and the possibility of OPEC+ reducing crude supplies. Brent Crude Oil price dipped ca 0.75% day-on-day to settle at US$100.46pb, while WTI lost ca 1.14% day-on-day to settle at US$93.84pb as at report time. Spot Gold rose ca 0.41% day-on-day to close at US$1,768.70 per ounce as of report time.