FIXED INCOME MARKET
Interbank system liquidity further improved to open with a balance of ca ₦227.41 billion, compared to yesterday’s opening balance of ca ₦163.58 billion. Thus, the Overnight Policy Rate (OPR) and Overnight (ON) rates declined to 9.50% and 9.63% respectively from 10.25% and 10.88%, recorded on the previous day.
The treasury bills market was muted to start the month, as investors tried to settle in and fully dissect the recently released Q1 2023 NTB issuance calendar. Overall, the average mid-rate closed relatively flat, day-on-day, to settle at 7.78%.
The FGN bonds market endured a bullish theme, with demand recorded 2037s and 2049s, however mild selling interest were witnessed on 2032s. Overall, the average mid-yield closed by c.8bps lower, day-on-day, to settle at 14.55%.
Fed Chair Powell’s latest speech drove a bullish bias at today’s trading session. Risk on sentiments dominated the African space leading to an average price appreciation of c.2pts across the curves. Market players liked the signaling of a reduction in the pace of rate hikes, although peak rates will likely be ‘somewhat higher’ than earlier projected. Overall, the average yield across the Nigerian sovereign curve settled at 11.19%.
In other news, Kenya inflation slows to 9.5%, BofA touts potential market beating returns for Ghana bonds and Ghana petroleum revenue soars 89% in Q3’22 according to the finance minister.
The domestic bourse started the month with a flattish performance, as the Nigerian Stock Exchange All Share Index (NGX ASI) marginally lost 0.01% day-on-day to settle at 47,656.64pts, while year-to-date return stayed relatively flat at +11.57%. Despite the tepid activities observed, buy interest was observed for bellwethers like Zenith Bank Plc (+3.88%), Access Holdings Plc (+1.76%), and Guaranty Trust Holding Company Plc (+1.50%), respectively.
The NGX Banking and Consumer Goods indices gained ca 2.16% and 0.77% while the NGX Oil & Gas index lost ca 0.08% day-on-day, respectively. The NGX Industrial Index closed flat.
FCMB Group Plc led the volume chart with ca 49.80 million units, while MTN Nigeria Communications Plc topped the value charts with ca ₦891.98 million worth of trades.
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate depreciated to ₦445.83/US$1.00 from ₦445.30/US$1.00, recorded the previous day.
Global oil prices extend gains due to the bullish market views that OPEC+ may further reduce supply at its meeting, and as loosening Covid limits in China encouraged prospects for increased crude demand. Brent Crude Oil price gained ca 2.23% day-on-day to settle at US$88.91pb, while WTI rose ca 2.82% day-on-day to settle at US$82.82pb as at report time. Spot Gold also gained ca 3.02% day-on-day to close at US$1,813.50 per ounce as of report time.