FIXED INCOME MARKETS
Money Markets
Opening system liquidity improved to a balance of c.₦234.57 billion, compared to Friday’s opening balance of c.₦197.26 billion. However, the Overnight Policy Rate (OPR) remained unchanged from Friday’s rate at 10.50% while the Overnight Rate (O/N) inched up by 2bps to 10.83%.
Outlook: We expect the interbank rates to hover at similar levels tomorrow.
Treasury Bills
The treasury bills market traded bearish in today’s session, as offers were domiciled at the long end of the curve, particularly 7 March 2024. Average yield climbed by 65bps to 4.98%.
Outlook: We expect the market activity to trade on a cautious note tomorrow.
FGN Bonds
The local bonds market was slightly bullish, with buyside interest mostly seen at the long end of the curve, particularly on the 2037 and 2049 papers. However, following the release of March 2023 FGN Bonds offering by the DMO, offers inched up by c.10bps across the 2037 and 2049 papers. Overall, average yield increased by 11bps to settle at 13.51%.
Outlook: We expect a calm session tomorrow, albeit tilted marginally to the buyside.
Eurobonds
Following the Silicon Valley Bank (SVB) fallout last week, and the market-suggested contagion risk across developed markets, the Eurobonds space witnessed a rally at the early hours of today’s trading session. However, market tilted to a bearish stance, as expectations for tomorrow’s US CPI data sent jitters. Overall, the average yield expanded by 21bps to 12.40%.
Outlook: We expect the U.S inflation report to be the most determining factor for the market trend tomorrow.
Equities
The Nigerian bourse closed relatively flat today, as the Nigerian Stock Exchange All Share Index (NGX ASI) fell marginally by c. 0.01% to close at 55,788.34 points while year-to-date return closed at c.8.85%. Selling interest in ZENITHBANK (-3.10%), GTCO (-1.89%) and DANGSUGAR (-0.78) drove the bearish theme that was recorded today. The NGX Industrial Goods, and Banking Index, depreciated in value by c. -0.08%, and c. -1.64%, respectively. On the other hand, The NGX Consumer Goods Index gained by c. 1.82%, while the Oil and Gas Index closed flat. NGXGROUP led both the volume and value charts with c. 38.15 million units and c. ₦ 995.95 billion, respectively.
Outlook: We expect the bearish sentiment to persist tomorrow, as investors take profit on their bank holdings at profitable levels.
Foreign Exchange
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate depreciated to ₦ 461.67/US$1.00 from ₦ 461.50/US$1.00 recorded at the close of Friday.
Outlook: We expect further weakening of the Naira at the NAFEX window.
Commodities
Oil prices lost c.$4 today, on the back of fears around in the global banking sector following the collapse of Silicon Valley Bank. However, the sustained rising demand from China served as the shock-absorber. Brent Crude Oil price decreased by c.-0.08% day-on-day to settle at US$81.68pb, while WTI decreased by c.-0.99% day-on-day to settle at US$75.92pb as at print time. Spot Gold appreciated in value by c.2.58% day-on-day to close at US$1,915.50per ounce as of report time.
Outlook: We expect the bearish sentiment to ease tomorrow, given the quick intervention of the concerned regulators.
