FIXED INCOME MARKETS
The Interbank market remained buoyant, as system liquidity improved further to c.₦1.41 trillion, compared to c.₦ 1.40 trillion recorded the previous day. Nevertheless, the Overnight Policy Rate (OPR) and Overnight Rate (O/N) remained unchanged at 9.50% and 9.83% respectively recorded the previous day.
Rates declined further in the Treasury bills market amid surfeit system liquidity. The Oct 2023 to Dec 2023 papers traded around 4.00% to 5.50% levels, while banks scramble for offers across the short end at c.2.20% levels. Thus, average rate closed c.4bps lower at 4.01%.
The FGN bonds market was bullish with ample interests recorded across 2024s, 2025s, 2026s, 2027s, 2029s, 2032s and 2037s, as investors extended their options, given the huge drop in rates across the bills curve. Overall, the average mid-yield declined by c.15bps to close at 13.03%.
Following the release of Dec’22 Fed minutes yesterday, where no rate cut is anticipated this year as the mandate to drive inflation to the desired level holds supreme, the Eurobond space opened softer with selling interest observed across most African papers. Investors are also starting to keep a keen eye on the economic situation in Nigeria, after new data from the Debt Management Office show that 80% of Nigeria’s Revenue Collection was consumed by debt payments in 2022. Overall, the average yield across the Nigerian sovereign curve closed at 11.19%.
The Nigerian bourse reversed its bullish sentiments, as the Nigerian Stock Exchange All Share Index (NGX ASI) declined by c.1.53% day-on-day to close at 50,868.52 points while market year-to-date return declined to c.-0.75%. The bearish sentiment was driven by selling activities on stocks like AIRTELAFRI (-8.26%) and FBNH (-0.45%).
The NGX Banking, Consumer goods and Oil & Gas Indices all gained c.0.88%, 1.33% and 0.09% respectively while the NGX Industrial Index closed flat at the end of the session. STERLNBANK led the the volume with c.29.15 million units while GTCO led the value charts c.₦ 477.77 million worth of trades respectively.
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate appreciated to ₦ 461.50/US$1.00 from ₦ 461.67/US $1.00, recorded the previous day.
Oil rebounded over 2% today after posting the biggest two-day loss for the start of a year in three decades with the shutdown of a U.S. fuel pipeline providing support, though economic concerns capped gains. Brent Crude Oil price gained c.0.44% day-on-day to settle at US$78.18pb, while WTI gained c.0.18% day-on-day to settle at US$72.97pb as at report time. Spot Gold lost c.1.08% day-on-day to close at US$1,838.70 per ounce as of report time.