FIXED INCOME MARKETS
Money Markets
Opening system liquidity increased with a balance of c.₦390.30 billion, compared to yesterday’s opening balance of c.₦341.69 billion. Nonetheless, the Overnight Policy Rate (OPR) and Overnight Rate (O/N) increased to 10.63% and 11.00%, respectively compared to yesterday’s rate of 10.50% and 10.81% respectively.
Outlook: We anticipate higher interbank rates, as settlement for the NTB auction takes place.
Treasury Bills
In today’s session, market players tilted their attention to the NTB primary market auction, where c. ₦224 billion was offered across the usual tenors. Thus, average mid-rate increased by 52bps to settle at 3.26%, amid mild sell interest witnessed earlier in the day.
Outlook: We expect the result of the NTB primary market auction to guide tomorrow’s trading sentiment
FGN Bonds
The local bonds market reflected a mixed to bearish theme, as early buy interest across 2037 and 2049 maturities turned bearish as offers came out in their droves to match the available bids. Soon after, the bids and offers inched upwards significantly across 2027, 2028, 2032, 2037 and 2049 maturities, albeit very few trades were executed. Overall, the average mid-yield increased by 5bps to close at 13.43%.
Outlook: We expect the bearish theme to persist tomorrow
Eurobonds
The SSA Eurobonds market sustained its bearishness in today’s session, as the market continue to bake the full extent of the US Fed’s fast pace of interest rate hike in the near-term. Thus, the average yield settled higher at 12.13% (up by 34bps).
Outlook: We expect the interest-rate-induced selloff to wane mildly as the market anticipate the job market data later this week.
Equities
The Nigerian bourse closed on a positive note today, as the Nigerian Stock Exchange All Share Index (NGX ASI) increased by c. 0.35% to close at 55,801.14 points while year-to-date return closed at c.8.88%. Buying interest in GTCO (+0.2%) ZENITHBANK (+0.05%), and MTNN (+1.5%) drove the bullish theme that was recorded today. The NGX Industrial Goods and Banking index appreciated in value by c. 0.84% and c. 0.06%, respectively. On the flip side, the Consumer Goods, and Oil & Gas depreciated in value by c. -0.06%, and c. -0.90%, respectively. COURTVILLE led the volume charts with c. 34.60 million units, while DANGCEM led the value charts with c. ₦ 2.08 billion worth of trades.
Outlook: We expect more positive performance in the Nigerian domestic bourse.
Foreign Exchange
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate appreciated to ₦ 461.25/US$1.00 from ₦ 461.50/US$1.00 recorded at the close of yesterday.
Outlook: We expect sustained FX pressures, CBN intervention and depreciation of the Naira
Commodities
On Wednesday, oil prices were unchanged as the market anticipated more information on inventories and concerns that demand might be negatively impacted by more aggressive U.S. interest rate increases. Brent Crude Oil price decreased by c.-0.23% day-on-day to settle at US$83.10pb, while WTI decreased by c.-0.43% day-on-day to settle at US$77.25pb as at the time of this report. Spot Gold depreciated in value by c.0.20% day-on-day to close at US$1,816.40per ounce as of report time.
Outlook: As we wait for clarification on the full impact of the U.S. interest rate hikes, we expect the price of oil to continue to decline.
