FIXED INCOME MARKET
Interbank system liquidity opened significantly higher today at ca ₦136.81 billion compared to yesterday’s opening balance of ca ₦55.28 billion. Thus, the Overnight Policy Rate (OPR) and Overnight (ON) rate closed lower at 11.63% and 11.75% respectively from 16.50% and 16.83%, recorded the previous day.
The treasury bills market witnessed an early burst of demand across the short to mid dated papers following yesterday’s NTB auction result but cooled off later in the day as offers gradually surfaced. Overall, the average mid-rate closed c.6bps lower, day-on-day, to settle at 4.80%.
The FGN bonds market also experienced a similar fate, where an early rush of buying interest caused 2037s to trade at c.14.00% before a reversal was witnessed following a higher-than-expected inflation numbers (21.47% vs Est. 21.30%) for November 2022, causing offers to trend upwards by close of trading. Thus, the average mid yield closed ca 8bps, day-on-day to settle at 13.46%.
The Eurobond space was mixed, following yesterday’s expected 50bps hike by the US Fed. However, with the rate pivot still a long way to go albeit at a slower pace as indicated by the Fed Chair Powell, the market reversed a bit of the gains recorded in the last couple of days, with key African papers trading lower. Overall, the average yield across the Nigerian sovereign curve closed at 11.12%.
Another positive session was observed at the domestic bourse today, as the Nigerian Stock Exchange All Share Index (NGX ASI) gained ca 0.50% day-on-day to close at 49,233.02pts, while the year-to-date returns extended to +15.26%. Market performance was largely influenced by buy interest on stocks like Stanbic IBTC Plc (+4.58%), MTN Nigeria Communications Plc (+2.88%), and Zenith Bank Plc (+2.17%), respectively.
The NGX Banking, Oil & Gas, Consumer Goods, and Industrial Indices gained 0.72%, 0.62%, 0.15%, and 0.13% day-on-day, respectively.
Sterling Bank Plc led the volume chart with ca 153.28 million units, while Airtel Africa Plc topped the value charts with ca ₦744.34 million worth of trades.
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate depreciated to settle at ₦451.33/US$1.00 from ₦450.58/US$1.00, recorded the previous day.
Global oil prices dropped today, but market sentiment on the likelihood of further interest rate hikes by central banks, along with dollar gains weighed on prices, capping the losses. Brent Crude Oil price lost ca 0.77% day-on-day to settle at US$82.06pb, while WTI dipped ca 1.05% day-on-day to settle at US$76.47pb as at report time. Spot Gold lost ca 1.81% day-on-day to close at US$1,785.80 per ounce as of report time.