FIXED INCOME MARKETS
Money Markets
Opening System liquidity remained buoyant today at c. ₦1.11 trillion long, compared with the opening balance of ₦1.31 trillion recorded yesterday. However, following the retail FX auction today, the Open Repo Rate (OPR) and Overnight Rate (O/N) nudged upward by 163bps and 188bps to 12.63% and 13.13%, respectively.
Outlook: We expect the interbank rates to slightly increase next week, as the CRR debit and other outflows should impact the liquidity status.
Treasury Bills
The treasury bills market was largely quiet today, with minimum buy and sell interests across board. Regardless of the mild sell interests noticed on the long end of the curve, average yield closed flat at 5.98%.
Outlook: We expect the market to teer towards a bullish posture next week, as participants gradually digest the improved system liquidity.
FGN Bonds
The local bonds market posted a bearish performance today, with selling interests across the 2037, 2049 and 2050 papers alongside uninterested buyers. As a result, average yield increased by 1bps to 13.87%.
Outlook: We expect market to trend around similar trajectory next week.
Eurobonds
The Nigerian Eurobond market traded bullish today, following the suspension of fuel subsidy removal as announced by Minister of Finance. Average yield increased marginally by 1bp 12.56%.
Outlook: We anticipate the outcome of the U.S F.O.M.C meeting to be at the spotlight of market jitters next week.
Equities
The Nigerian equity market extended its bullish sentiment today, as the Nigerian Stock Exchange All Share Index (NGX ASI) gained c. 0.32% to closed at 52,403.51, while year-to-date return improved to c 2.25%. Buying interest in CADBURY (9.76%), FIDELITYBK (9.04%) and, DANGSUGAR (5.69%) drove the uptrend in today’s session.
The NGX Banking, Industrial and Consumer Goods Indices appreciated by 0.94%, 0.01%, and 2.90%, respectively. However, the NGX Oil & Gas Index depreciated by 0.17. ACCESSCORP led both the volume charts with c. 82.77 million units and the value charts with c. ₦ 817.19 million.
Outlook: We expect the bullish bias to linger next week, albeit on a less aggressive note.
Foreign Exchange
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate depreciated to ₦463.00/US$1.00 from ₦462.00/US$1.00 recorded yesterday.
Outlook: We expect the exchange rate to revolve around $/₦462 – 463 levels, next week.
Commodities
Oil prices extended its relief theme in today’s session, even as the monthly performance heads towards a bearish close. Brent oil prices appreciated by c. 1.44% to $79.50 per barrel in intraday trade, while WTI appreciated by c 2.09% day-on-day to settle at US$76.32pb as at print time. Meanwhile, Spot Gold depreciated by c. 0.06% day-on-day to close at US$2,000.10 per ounce as of report time.
Outlook: We expect the movement in oil prices to be partly dictated by the U.S Fed’s interest rate decision next week.
