FIXED INCOME MARKET
Interbank system liquidity improved today with an opening balance of c.
₦173.93 billion, compared to c.₦120.34 billion recorded at last week’s close. Thus, the Overnight Policy Rate (OPR) and Overnight Rate(O/N) trended lower to 9.50% and 10.00% respectively from 13.50% and 13.67% reported on Friday.
In the Treasury bills market, there was demand for Sept 2022 CBN Special Bills and long dated NTBs but offers on these papers were scarce, instead sellers offered Nov 2022 and Dec 2022 CBN Special Bills at c.11.00% levels. Thus, average rate stayed relatively unchanged at 7.70% due to the muted market activity.
Buying interest was recorded on 2026, 2032, 2042 and 2050 papers at today’s FGN local bonds trading session, however most sellers hoarded their offers on the back of a relatively buoyant system and reduced funding pressure. Overall, average yield dipped by c.7bps to 12.98%.
The Eurobonds space witnessed a risk-off tone at today’s session on the back of last week’s speech by Fed chair Powell at the Jackson Hole symposium and yesterday’s UK bank holiday. Investors continue to gauge the impact of the hawkish tone with sustained downward repricing of risk assets, as such, Nigeria, Ghana, Angola and Egypt Eurobonds all closed on average c.1.95pts lower. Overall, the average yield closed at 10.32%.
The domestic bourse continued to trade on a negative note as the Nigerian Stock Exchange All Share Index (NGX ASI) lost 0.07% day-on-day, closing at 49,642.69pts while year-to-date returns stood at +16.21%. This performance was largely due to selling sentiment on banking stocks like ACCESSCORP (-0.61%), MTNN (-0.50%) and Guaranty Trust Holding Company Plc (-0.25%).
The NGX Oil & Gas Index rose by c.0.10%, the NGX Banking Index lost c.0.13% while the NGX Industrial and Consumer Goods Indices remained unchanged. Mutual Benefit Insurance led the volume chart with c.25.34million units while MTN Nigeria topped the value charts with c.₦ 1.45billion worth of trades
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate depreciated slightly to ₦431.00/US$1.00 from ₦430.33/US$1.00 recorded on at the previous day.
Oil prices dipped on Tuesday, paring some gains from the previous session, as the market feared that more aggressive interest rate hikes from central banks may lead to a global economic slowdown and soften fuel demand. Brent Crude Oil price lost c.3.93% day-on-day to settle at US$100.95pb, as the WTI also lost c.4.00% day-on-day to settle at US$93.20pb as at report time. Spot Gold dipped by c.0.83% day-on-day to close at US$1,735.10 per ounce as of report time.