FIXED INCOME MARKETS
Money Markets
Opening System liquidity increased to c. ₦ 320.88 billion long, compared with the opening balance of ₦293.02 billion recorded yesterday. However, the Open Repo Rate (OPR) remained unchanged at 11.00% while the Overnight Rate (O/N) increased to 11.50%.
Outlook: We expect the interbank rates to cling at its upper band level.
Treasury Bills
Mixed sentiments dominated the treasury bills market today, with demand witnessed on short end of the curve while sideways interest was seen on the mid to long end, particularly across Mar and April 2024 papers. Bids hovered around 10.10%-10.30%, while offers dangled around 9.80%-10.00%. Overall, mild volumes were consummated across the curve, causing the average mid-rate to decline by 58bps to close at 6.84%.
Outlook: We expect a mixed to bullish market tomorrow.
FGN Bonds
Yields across the long dated FGN bonds papers (2037s and 2050s particularly) increased today, amid aggressive offers by sellers and the seemingly dearth of real demand. Investors continued to play the wait and see approach, while speculators and few buyers kept cherry-picking the relatively attractive yields. Thus, the average mid-yield settled at13.90%.
Outlook: We anticipate this trend to persist tomorrow, barring any major catalyst.
Eurobonds
Ahead of today’s FOMC meeting, the Eurobond market endured a mixed theme, with few axes recorded across some of the SSA papers. The general theme amongst investors is that today’s expected hike may be the last in the rate-hike cycle given the already jittery market on the back of sky-high US debt ceiling and risk in the banking sector.
Outlook: Market is expected to be guided in subsequent trading sessions by the decisions at the Fed meeting.
Equities
The Nigerian equity market closed on a negative note today, as the Nigerian Stock Exchange All Share Index (NGX ASI) depreciated by c. 0.17% to closed at 52,207.77 , while year-to-date return improved to c 1.87%. Selling interest in TRANSCORP (-0.24%) and DANGSUGAR (-0.05%) drove the downward trend in today’s session. The NGX Banking, Industrial Goods and Oil &Gas Indices appreciated by 0.17%, 0.07%, and 0.78%, respectively. However, the NGX Consumer Goods Index depreciated by 0.49%. TRANSCORP led the volume charts with c. 276.53 million units while ACCESSCORP the value charts with c. ₦ 1.81 billion.
Outlook: We expect the bearish bias to linger tomorrow.
Foreign Exchange
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate depreciated to ₦463.00/US$1.00 from ₦462.33/US$1.00 recorded last week Friday.
Outlook: We expect the exchange rate to revolve around $/₦462 – 463 levels.
Commodities
After falling by roughly 5% to a five-week low the previous session, oil prices continued to decline on Wednesday as investors anticipated additional rate increases this week that may reduce energy demand. Brent oil prices depreciated by c. 2.06% to $73.77per barrel in intraday trade, while WTI depreciated by c 2.23% day-on-day to settle at US$70.06pb as at print time. Meanwhile, Spot Gold appreciated by c. 0.11% day-on-day to close at US$2,025.60 per ounce as of report time.
Outlook: We expect the movement in oil prices to fall as investors brace for rate hikes.
