FIXED INCOME MARKETS
System liquidity remained buoyant today at c.₦384.58 billion vs c.₦371.23 billion recorded the previous day. Thus, the Overnight Policy Rate (OPR) and Overnight Rate (O/N) remained unchanged at 9.50% and 9.83% respectively from the previous day.
The NTB market remained bullish with further decline in rates across the curve. Long dated bills dropped to 5.00% levels amid huge demand, thus causing an average mid-rate decline of c.8bps to 3.84%.
It was a mixed session in the FGN bonds space, as demand was recorded across 2027s, 2037s and 2050s securities, while sellers showed higher offers across 2026s, 2032s, 2035s, 2049s papers. Overall, average mid-yield closed c.6bps higher at 13.91%.
The Eurobond space rebounded today, with demand recorded across the SSA and MENA curves. The Nigeria, Angola and Egypt papers all recorded significant buyside interest and thus traded much higher, averaging c.1.85pts across most papers. Overall, the average yield across the Nigerian sovereign curve closed at 9.87%.
In other news, Nigeria’s finance minister rules out Eurobond sale this year, due to high yields and plans to reduce the country’s debt-service-to-revenue ratio to 60% this year by boosting oil production and reducing government fuel subsidy.
The domestic bourse closed the day on a negative note, as the Nigerian Stock Exchange All Share Index (NGX ASI) lost c.0.16% day-on-day to close at 52,701.31 points while market year-to-date return was recorded at c.2.66%. Selling activities on stocks like DANGCEM (-1.85%) and WAPCO (-1.01%) drove the index south.
The NGX Banking & Oil & Gas Indices both gained c. 0.05% and 0.07% respectively while the NGX Consumer goods and Industrial Indices both lost c. 0.99% and 0.20% respectively the close of the session. STERLNBANK led the volume with c.94.27 million units while GEREGU led the value charts with c.₦ 1.35 billion worth of trades.
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate appreciated slightly to ₦ 461.25/US$1.00 from ₦ 461.50/US$1.00 recorded at the previous day.
Oil prices rose today to their highest since early Dec’22 on optimism that the lifting of China’s strict Covid-19 curbs will lead to a fuel demand recovery in the world’s top oil importer. Brent Crude Oil price gained c.1.70% day-on-day to settle at US$87.39pb, while WTI gained c.2.18% day-on-day to settle at US$81.93pb as at the time of this report. Spot Gold lost c.0.71% day-on-day to close at US$1,923.40 per ounce as of report time.