FIXED INCOME MARKETS
Money Markets
Opening system liquidity recorded a positive balance of c.₦662.61 billion, compared to yesterday’s opening balance of c.₦269.80 billion, due to FAAC inflows. Consequently, the Overnight Policy Rate (OPR) and Overnight Rate (O/N) remained unchanged at 10.50% and 10.81% respectively.
Outlook: We expect the interbank rates to remain at low double digits amid weak funding pressure.
Treasury Bills
The treasury bills market started off mixed, with activities domiciled on the newly issued 1-year paper and March to May 2023 bills. However, towards the end of the trading session, the market slid to a tepid note as market players closed from their desks early ahead of tomorrow’s elections. Thus, the average yield remained relatively unchanged at 5.52%.
Outlook: We expect the activity in the treasury bills market to remain depressed, in the absence of any significant driver.
FGN Bonds
In the early hours of trading, market was slightly bearish, with sell interests observed on selected papers, specifically on the 2028 and 2037 maturities. However, market activities moderated towards the closing bell. Consequently, average yield inched up marginally by 1bp to close at 13.70%.
Outlook: We expect a similar trend next week, even as market players close their books for the month.
Eurobonds
The Eurobonds market extended its bullish performance in today’s session, with buy interests across board. However, selloffs were noticed in Ghana, due to the delayed meeting with China on debt cancellation, as it stands a critical stage for the IMF bailout. Overall, the average yield fell by 16bps to 11.79% across the Nigerian curve.
Outlook: We anticipate Nigeria’s Eurobonds market to be swayed by the outcome of the general election scheduled for tomorrow.
Equities
The Nigerian domestic bourse closed on a positive note, as the Nigerian Stock Exchange All Share Index (NGX ASI) appreciated in value by c.0.55% day-on-day to close at 54,949.33 points while year-to-date return closed at c.7.22%. Buying activities on pacesetters like ZENITHBANK(+0.4%) GTCO (+0.2%) and ACESSCORP (+0.05%) drove the bullish theme. The NGX Consumer Goods ,Banking, Industrial Goods and Oil &Gas Indices all appreciated in value by c. 2.55%, c. 1.76, c. 0.33 and c. 1.19% respectively. GTCO led the volume charts with c. 14.14 million units, while SEPLAT led the value charts with c. ₦ 528.86 million worth of trades, respectively.
Outlook: We expect future trading in the Nigerian domestic bourse to be reflective of the outcome of the election, as investors will be keen on who steers the affairs of the Nigerian economy going forward.
Foreign Exchange
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate appreciated to ₦ 461.17/US$1.00 from ₦ 461.33/US$1.00 recorded at the close of the previous day.
Outlook: We expect sustained FX pressures, CBN intervention and depreciation of the Naira.
Commodities
Oil prices extended gains for a second session on Friday as the prospect of lower exports from Russia offset rising inventories in the United States. Brent Crude Oil price increased by c.0.91% day-on-day to settle at US$82.96pb, while WTI also increased by c.0.93% day-on-day to settle at US$76.09pb as at the time of this report. Spot Gold appreciated in value by c.0.21% day-on-day to close at US$1,830.70 per ounce as of report time.
Outlook: The commodities market should see Oil prices continue to witness swings, amid rising inventories and possible lower exports.
