FIXED INCOME MARKET
Interbank system liquidity opened at c.₦319.67 billion today, significantly higher than yesterday’s opening of c.-₦115.64 billion, due to FAAC inflows. Thus, the Overnight Policy Rate (OPR) and Overnight (ON) rates trended lower to settle at 9.63% and 9.88% from 17.13% and 17.25% recorded on the previous day.
The NTB secondary market witnessed a rally across mid to long end papers, buoyed by FAAC inflows of c. ₦416bn that hit the system. Bids on the newly issued 1-year paper dropped to 13.60%, with offers closing at 13.20% levels. Overall, the average rate closed c.22bps lower, day-on-day, to settle at 8.39%.
The FGN bonds market witnessed mixed sentiments, as demand was observed on 2026s, 2037s, 2042s, 2049s and 2050s, while sellers improved the offer yields on 2032s to 15.10%. Thus, the average mid-yield closed relatively flat, day-on-day, to settle at 14.76%.
The Eurobond space witnessed a lull amid the US holiday, however sentiments remained positive as yesterday’s US Fed minutes indicated support for a tapering of rate increases soon. Overall, the average yield across the Nigerian sovereign curve settled at 11.25%.
In other news, Nigeria’s economy grew 2.25% year-on-year in the third quarter amid a drop in the country’s oil production (Est. +2.90%), Kenya’s FX reserves dropped to seven-year lows breaching four months import cover level and Ghana’s Finance Minister presented the 2023 budget today.
The domestic bourse closed the day in the green, despite the profit-taking activities observed on some stocks. The Nigerian Stock Exchange All Share Index (NGX ASI) gained 0.81% day-on-day to close at 46,604.94pts, while the market year-to-date returns extended to +9.10%. Investors took buy interests in bellwethers like Nigeria Breweries Plc (+6.79%) and Airtel Africa Plc (+6.30%) which largely influenced market’s positive performance.
The NGX Oil & Gas, Banking, Consumer Goods, and Industrial Indices all dipped 1.86%, 1.37%, 0.42%, and 0.38%, day-on-day, respectively.
Sterling Bank Plc led the volume chart with ca 24.25 million units, while Airtel Africa Plc topped the value charts with ca ₦791.28 million worth of trades.
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate appreciated to ₦445.00/US$1.00 from ₦446.00/US$1.00, recorded the previous day.
Global oil prices extended their losses from the previous day on reports that the Group of Seven (G7) nations were considering a high price restriction on Russian oil. Brent Crude Oil price lost ca 0.85% day-on-day to settle at US$84.68pb, while WTI dipped ca 0.37% day-on-day to settle at US$77.65pb as at report time. Spot Gold rose ca 0.601 day-on-day to close at US$1,756.20 per ounce as of report time.