FIXED INCOME MARKETS
Opening system liquidity remained significantly buoyant at c.₦ 1.22 trillion, compared to yesterday’s balance of c.₦ 956.95 billion. Nevertheless, the Overnight Policy Rate (OPR) and Overnight Rate (O/N) both remained unchanged at 10.50% and 11.00% respectively, despite the latest round of CRR debits across banks.
In the Treasury bills market, higher offers were recorded on the long end of the curve, especially on 25-Jan-2024 bill which was offered at c.2.50%, much better than yesterday’s 1.80% offer. This was driven by the latest round of CRR debits across banks, as most banks had to sell existing long positions to raise liquidity. Overall, the average mid rate printed c.17bps higher to 3.73%.
The FGN bonds market witnessed buyside interest on the 2024 paper at 8.30% levels, with both 2037s and 2049s bid at 15.40% but offers were much lower as players continue to take position ahead of Monday’s FGN bond auction. Consequently, the average mid-yield closed c.8bps lower to settle at 13.92%.
Mixed to bearish sentiment ensued in the Eurobond space as a stronger than expected Q4’2022 GDP and initial jobless claims in the US meant that the Fed could sustain a hawkish theme for much longer. Ghana and Angola securities were better bid with few interests from retail and institutional clients, while Nigeria and Egypt papers traded lower prices. Overall, the average yield across the Nigerian sovereign curve closed at 10.54%.
The Nigerian equities market sustained its bearish trend to close the week, as the Nigerian Stock Exchange All Share Index (NGX ASI) depreciated by c.0.18% day-on-day to close at 52,657.88 points while market year-to-date return declined to c.2.74%. This was spurred by selling interest on bellwethers such as ACCESSCORP (-4.26%), GUINNESS (-3.71%) and MTNN (-1.75%).
The NGX Banking and Consumer Goods Indices both declined in value by c. 0.03% and 0.39% respectively while the NGX Industrial Index and Oil & Gas Indices both appreciated by c.0.01% and 0.13% respectively. FIDELITYBK led the volume chart with c.26.64 million while MTNN led the values charts and c.₦ 407.50 billion worth of trades.
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate depreciated to ₦ 461.75/US$1.00 from ₦ 461.25/US$1.00 recorded the previous day.
Oil prices trended higher, buoyed by better-than-expected U.S. economic growth, strong middle distillate refining margins and hopes of a rapid recovery in Chinese demand. Brent Crude Oil price gained c.0.79% day-on-day to settle at US$88.16pb, while WTI gained c.0.72% day-on-day to settle at US$81.56b as at the time of this report. Spot Gold lost c.0.32% day-on-day to close at US$1,923.90 per ounce as of report time.