FIXED INCOME MARKETS
Money Markets
System liquidity remained in its negative territory today, with an opening balance of c.-₦160.70billion, compared to yesterday’s opening negative balance of c.-₦81.08 billion. However, the Overnight Policy Rate (OPR) and Overnight Rate (O/N) declined to 18.50% and 18.88%, respectively from 18.63% and 19.00%recorded yesterday.
Outlook: We expect the interbank rates to remain at its elevated levels.
Treasury Bills
The treasury bills market was saturated with offers around the belly and long end of the curve, especially on papers like the 28 March 2024, 22 February 2024, and 7 August 2023. Despite some consummated demands at good levels, average yield shed 64bps to 8.05%.
Outlook: We expect the market activity to be skewed towards the NTB auction next week.
FGN Bonds
For the most part of today’s session, the local bonds market was bearish, as offers were observed on the 2037 and 2049 papers. Although, buy interests came in briefly, however, unaggressive. Average mid-yield declined marginally by 1bp to 13.93%.
Outlook: We expect activity to stay relatively muted, barring any significant catalyst.
Eurobonds
The Eurobonds market started off nearly neutral, as market participants slowly digested the $800m loan to Nigeria from World Bank, which is intended to facilitate the execution of the long-discussed “fuel subsidy removal”. Furthering into the session, the market trended downwards with sell interests across the curve. Average yield increased by 18bps to 12.31%.
Outlook: We expect the market sentiment to be tossed by the U.S Nonfarm Payroll tomorrow and the US inflation data next week.
Equities
The Nigerian equity market closed on a bearish note, as the Nigerian Stock Exchange All Share Index (NGX ASI) declined in value by c.-0.05% day-on-day, to close at 52,994.13, while year-to-date return closed at c 3.40%. Selling interest in GTCO (-0.3%) and TRANSCORP (-0.01%) led to the negative performance recorded today. The NGX Consumer Goods, Industrial Goods and Oil & Gas Indices depreciated in value by c. -0.17%, c. -0.04% and c.-0.17 respectively, while the NGX Banking Index appreciated in value by c. 0.08%. TRANSCORP led the volume charts with c.147.14 million units while ZENITHBANK led value charts with c. ₦ 487.11 million.
Outlook: We expect the bearish bias to linger next week.
Foreign Exchange
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate appreciated to ₦463.25/US$1.00 from ₦463.75/US$1.00 recorded yesterday.
Outlook: We expect the Naira to remain steady at $/₦463 levels at the NAFEX window.
Commodities
On Thursday, oil was on track for weekly gains, with OPEC+ targeting additional production cuts and a reduction in US oil stocks overshadowing concerns about global economic growth. Brent oil prices declined by c. -0.05% to $84.95 per barrel in intraday trade, while WTI shed c -0.04% day-on-day to settle at US$80.58pb as at print time. Similarly, Spot Gold depreciated in value by c. -0.79% day-on-day to close at US$2,019.60 per ounce as of report time.
Outlook: We expect oil price to lurch at closed-range bands in the interim.
