FIXED INCOME MARKETS
Money Markets
Opening system liquidity moderately declined with a balance of c.₦985.49 billion long, compared to yesterday’s opening balance of c.₦1.017 trillion, due to Retail FX auction. Thus, the Overnight Policy Rate (OPR) and Overnight Rate (O/N) expanded by 162bps to 12.13% and 12.43%, respectively.
Outlook: We expect the interbank rates to rise towards its upper band levels next week, due to the CRR debit at COB today.
Treasury Bills
The treasury bills market traded mixed sentiments today, as buy interests were less aggressive despite available offers amid expectation of CRR debits. Across the curve, yields dangled insignificantly, given the inactive participation by market players. Nevertheless, the average mid-rate declined by 3bps to settle at 3.10%.
Outlook: We expect market sentiment to be skewed towards the NTB auction next week, where the DMO would be offering c. N224 billion across the usual tenors.
FGN Bonds
The local bonds market traded sideways today, although, less aggressive. The market opened with buy interests on 2028, 2037 and 2049 papers. Subsequently, offers came in for the on-the-run bonds, however, relatively unattractive. Consequently, average yield closed relatively flat at 13.48%.
Outlook: We expect similar performance next week, barring any major catalyst.
Eurobonds
Nigeria’s Eurobonds market traded bullish today, due to a rebound in its crude oil production output. According to OPEC, Nigeria produced 1.44mbpd in February, marking its highest production output over the past one year. Overall, the SSA region closed bullish today, although sell interest was witnessed in Egypt. Consequently, the average yield shed 24bps to settle at 11.94%.
Outlook: Next week, we anticipate the US job report to be at the front burner in determining market direction.
Equities
The Nigerian bourse closed on a negative note today, as the Nigerian Stock Exchange All Share Index (NGX ASI) depreciated in value by c.-0.25% day-on-day to close at 55,529.21 points while year-to-date return closed at c.8.35%. Selling interest in SEPLAT (9.43%) OANDO (8.62%), and GTCO (0.75%) drove the downward trajectory. The NGX Oil and Gas index depreciated in value by -4.62%, while the Consumer Goods and Banking sectors appreciated in value by c. 0.20%, and 0.17%, respectively. However, the Industrial Goods Index closed flat. CHAMS led the volume charts with c. 571.07 million units, while ZENITHBANK led the value charts with c. ₦ 461.81 million worth of trades.
Outlook: We expect activities to stir up next week, as the unfolding earnings report and dividend announcement jiggles market players.
Foreign Exchange
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate depreciated at ₦ 461.75/US$1.00 from ₦ 461.35/US$1.00 recorded at the close of yesterday.
Outlook: We expect sustained FX pressures, CBN intervention and depreciation of the Naira.
Commodities
Oil prices declined today but were poised to register a weekly gain as renewed optimism on China’s demand recovery overrode recession worries over growing U.S. crude inventories and tightening monetary policy in Europe. Brent Crude Oil price decreased by c.-0.90% day-on-day to settle at US$83.99pb, while WTI also fell by c.-0.78% day-on-day to settle at US$77.55pb as at the time of this report. Spot Gold appreciated in value by c.0.38% day-on-day to close at US$1,847.50per ounce as of report time.
Outlook: We anticipate more volatilities in Oil prices amid demand recovery in China and monetary policy stance across Europe.
