FIXED INCOME MARKETS
Money Markets
Opening system liquidity declined to ₦59.80billion, compared to last week Friday’s opening balance of ₦235.84 billion. However, the CBN, the Overnight Policy Rate (OPR) and Overnight Rate (O/N) decreased to 12.25% and 12.70% respectively compared to 13.25% and 13.80% recorded last week Friday.
Outlook: We expect the interbank rates to inch up by mid-week due to the settlement of the FGN bond auction.
Treasury Bills
The treasury bills market was quiet in today’s trading session, as market participants remained on the sideline ahead of tomorrow’s MPC meeting. As a result, average yield stayed unchanged at 5.26%.
Outlook: We expect the rate decision of the CBN to dictate market sentiment tomorrow.
FGN Bonds
The local bonds market was relatively quite today, with few cares for the 2037 paper, as market tilted attention to the FGN bonds auction. Thus, the average mid-yield closed marginally lower by 1bp to settle at 13.70%.
Outlook: We expect the result of the bond auction as well as the outcome of tomorrow’s MPC to direct the market trend tomorrow.
Eurobonds
The SSA Eurobond sold off today, against the backdrop of UBS’s $3.24 Billion purchase of Credit Suisse, as pessimism fueled the market sentiment about the health of the global banking sector. Shortly before the closing bell, the market regained some of it losses, safe for 30bps hike in average yield to settle at 13.70%.
Outlook: We expect the bearish bias to ease tomorrow.
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.-0.05% day-on-day to close at 54,886.04 while year-to-date return closed at c.7.09%. Selling interest in NB (-1.25%), and STANBIC (-3.4%) led to the bearish note that was recorded in the market today. The NGX Industrial Goods and Banking indices, both appreciated in value by c. 0.06%, and c. 1.30%, respectively, however, the NGX Consumer Goods Index depreciated in value by c. -0.36%.While the NGX Oil and Gas Index closed flat. NEIMETH led both the volume and value charts at c. 1.07 billion units, and c. ₦ 1.58 billion, respectively.
Outlook: We expect the outcome of the MPC meeting to dictate the direction of market sentiment.
Foreign Exchange
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate appreciated to ₦ 461.50/US$1.00 from ₦ 461.83/US$1.00 recorded at the close of yesterday.
Outlook: We expect the Naira to continue to hover at $/₦ 461 handles at the NAFEX window.
Commodities
Amid the banking sector’s crisis, Brent oil prices declined on Monday, falling below $72 per barrel in intraday trade. Brent Crude Oil price decreased by c.2.55% day-on-day to settle at US$71.11pb, while WTI decreased by c.-2.71% day-on-day to settle at US$64.93pb as at print time. Spot Gold appreciated in value by c.0.95% day-on-day to close at US$1,992.20per ounce as of report time.
Outlook: We expect the fall in Oil price to persist.
