FIXED INCOME MARKETS
System liquidity opened lower today at c.₦ 581.26 billion long, compared to c.₦ 1.22 trillion recorded last week Friday, due to CRR debits. Nevertheless, the Overnight Policy Rate (OPR) and Overnight Rate (O/N) both remained unchanged at 10.50% and 11.00% respectively, relative to Friday’s close.
The treasury bills market witnessed a muted theme, albeit with mixed interests recorded on the 25-Jan-2024 Bill at 3.00%. There were also few sellers of June, August, September and November 2023 papers. Overall, the average mid-rate closed relatively flat at 3.73%.
The FGN bonds market endured a quiet session, as participants were focused on the FGN bond auction where N360bn (N90bn each) was offered across 4 maturities (2028s, 2032s, 2037s and 2049s). However, few buyside interests were recorded on 2024s and 2025s, with a handful of trades recorded. Thus, the average mid-yield closed c.9bps lower at 13.83%.
Moody’s latest downgrade of Nigeria’s long term foreign debt rating to Caa1 from B3 (stable outlook), ensured the Nigerian curve recorded significant weakness, with selling interest witnessed from Offshore and some local players, causing an average price decline of c.3pts to 10.51%. Other SSA and MENA curves also traded lower prices as investors traded sentiments around the upcoming FOMC meeting.
In other news, Ghana raised its benchmark interest rate to 28.00% (Est. 29.00%) , while Kenya maintained its benchmark rate at 8.75% (Est. 9.00%).
The Nigerian equities market started the week with positive sentiments, as the Nigerian Stock Exchange All Share Index (NGX ASI) gained c.0.95% day-on-day to close at 53,157.83 points while market year-to-date return extended to c.3.72%. Demand across bellwethers such as AIRTELAFRI (+3.11%), GTCO (+2.25%) and WAPCO (+1.63%) drove the positifve sentiment.
The NGX Banking, Industrial and Consumer Goods Indices all appreciated in value by c. 0.66%, 0.08% and 0.24% respectively while the NGX Oil & Gas Index remained unchanged from the previous week. ZENITHBANK led the volume chart with c.36.76 million while GEREGU led the values charts and c.₦ 1.79 billion worth of trades
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate appreciated to ₦ 461.50/US$1.00 from ₦ 461.75/US$1.00 recorded on Friday.
Oil prices extended losses today as looming increases to interest rates by major central banks and signs of strong Russian exports, offset rising Middle East tension over a drone attack in Iran and hopes of higher Chinese demand. Brent Crude Oil price lost c.0.76% day-on-day to settle at US$86.00pb, while WTI lost c.0.78% day-on-day to settle at US$79.05b as at the time of this report. Spot Gold lost c.0.20% day-on-day to close at US$1,941.80 per ounce as of report time.