FIXED INCOME MARKETS
System liquidity opened significantly higher at c.₦886.11 billion, bolstered by FAAC inflows, compared to yesterday’s opening balance of c.₦71.64 billion. Consequently, the Overnight Policy Rate (OPR) and Overnight Rate (O/N) declined to 9.83% and 10.17% respectively from 10.67% and 11.17% recorded the previous day.
The NTB market traded bullish, building up to tomorrow’s NTB auction where c.N220bn will be offered across the usual tenors. Long dated papers traded as low as 4.30%, while short and mid tenors traded at c.1.10% and c.2.50% levels respectively. Thus, the average mid-rate closed c.8bps lower at 3.71%.
Activity in the FGN bonds market was mixed, as some investors demanded for 2024 to 2027 papers while short sellers offered 2032, 2037 and 2049 papers. However, following the hike in benchmark interest rate to 17.50%, bids and offers were repriced lower across 2028s, 2032s, 2037s and 2049s. Overall, the average mid-yield closed c.3bps higher at 14.12%.
Mixed sentiments dominated the Eurobond space with selling interest recorded across Nigeria, Angola and Egypt securities, while Ghana traded higher prices as debt restructuring talks continue to progress. Overall, the average yield across the Nigerian sovereign curve closed at 10.49%.
In other news, Nigeria hikes its benchmark interest rate to 17.50% (+100bps); Ghana banks agree to a proposed 5% coupon payment in domestic debt swap program, and 9% coupon on 12 new issues; ECB’s Lagarde cut a hawkish figure saying “will do everything necessary to return inflation to its goal”.
The Nigerian equities market closed the trading session with bearish sentiments, as selling activities on NB (-10.00%) and GTCO (-0.41%) fueled the markets negative performance. The Nigerian Stock Exchange All Share Index (NGX ASI) dipped by c.0.09% day-on-day to close at 52,612.55 points while market year-to-date return closed lower at c.2.66%.
The NGX Banking & Industrial Indices both rose by c.0.32% and 0.36% respectively, the NGX Consumer goods declined by c.1.21% while the NGX Oil & Gas Index remained unchanged from the previous week. GEREGU led both the volume and value charts with c.23.84 million and c.₦ 3.20 billion worth of trades respectively.
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate appreciated to ₦ 461.00/US$1.00 from ₦ 461.63/US$1.00 recorded the previous day.
Crude oil prices were steady today as concerns about a global economic slowdown and expected build in U.S. oil inventories were offset by hopes of a fuel demand recovery from top importer China. Brent Crude Oil price lost c.0.52% day-on-day to settle at US$87.74pb, while WTI lost c.0.59% day-on-day to settle at US$81.14b as at the time of this report. Spot Gold gained c.0.07% day-on-day to close at US$1,929.10 per ounce as of report time.