FIXED INCOME MARKETS
System liquidity declined to open at c.₦341.46 billion compared to yesterday’s opening balance of c.₦ 370.18 billion. Nevertheless, the Overnight Policy Rate (OPR) and Overnight Rate (O/N) declined to 9.50% and 9.83% respectively from 10.17% and 10.83% recorded the previous day.
The treasury bills market witnessed demand on short tenor papers at c.2.80% levels but interest was weak at the long end of the curve, ahead of tomorrow’s NTB auction (the first for 2023). Thus, the average mid-rate rose by c.4bps to 4.02%.
The bearish theme was sustained in the FGN bonds space, as speculators take position in expectation of the release of Q1’2023 FGN bond issuance calendar. Most of the selling interests were skewed to 2026s, 2029s, 2032s, 2037s, 2042s, 2049s and 2050s, thus causing the average mid-yield to inch up by c.12bps to 13.24%.
The Eurobond space slipped into the red zone at today’s session, as buyside interests take a pause ahead of Thursday’s inflation data release and chatters of slower but cautious rate hikes by the Feds. Investors are basically adopting a wait and see approach, but the underlying theme is swinging to a bullish bias. Overall, the average yield across the Nigerian sovereign curve closed at 10.71%.
The Nigerian bourse took a bearish turn, as the Nigerian Stock Exchange All Share Index (NGX ASI) depreciated by c.0.48% day-on-day to close at 51,446.60 points while market year-to-date return closed lower at c.0.38%. Selling activities on bellwether stocks like AIRTELAFRI (-4.29%) and GTCO (-0.21%) drove the index southwards.
The NGX Banking and Industrial Indices both gained c.0.07% and 1.54% respectively, the NGX Consumer Goods Index lost c. 0.11% while the NGX Oil &Gas Index closed flat at the end of the session. FBNH led the the volume with c.151.39 million units while BUACEMENT led the value charts c.₦ 2.92 billion worth of trades.
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate appreciated slightly to ₦ 461.50/US$1.00 from ₦ 461.67/US$1.00 recorded at the close of the previous day.
Oil prices were stable today as the market awaited the Federal Reserve’s plans for rate hikes to gauge the impact on the economy and fuel demand. Brent Crude Oil price gained c.0.25% day-on-day to settle at US$79.87pb, while WTI gained c.0.47% day-on-day to settle at US$74.89pb as at the time of this report. Spot Gold gained c.0.26% day-on-day to close at US$1,882.90 per ounce as of report time.