FIXED INCOME MARKETS
Opening System liquidity fell slightly to c.₦701.24 billion long, compared with the opening balance of ₦756.77 billion recorded yesterday. Nonetheless, the Open Repo Rate (OPR) increased by 113bps to 12.13%, while the Overnight Rate (O/N) expanded by 125bps to 12.63% respectively.
Outlook: We expect the interbank rates to expand further next week, as the bond auction settlement should partly mop off system liquidity.
The treasury bills market retreated to a bearish posture after the bullish rally that clouded the market over the last few days. Moreso, sellers improved offers, in a bid to attract market bids. Notably, offer on 9 May 2024 paper improved from 7.40% to 8.00%, while the average mid-rate across board expanded by 11bps to 4.85%.
Outlook: We expect the bearish bias to dominate the market next week.
The local bonds market closed today’s session on a flat note, after the mixed sentiment that swerved across selected papers like 2028, 2037 and 2050. Hence, average yield remained relatively flat at 14.14%.
Outlook: We expect activities to improve next week, as players brace up for the bond auction where the DMO will be offering ₦360.00bn bonds across the 2028, 2032, 2042 and 2050 papers.
The Nigerian Eurobonds market traded mixed to bearish today, although, with minor activities. However, other SSA peers traded actively bullish, as market continues to phase out the risk-off sentiment. Average yield increased by 3bps to 12.79%.
Outlook: We expect the bullish sentiment to ease, as the country-specific events should tip-toe towards the market spotlight for investors.
The Nigerian equity market closed on a bullish note today, as the Nigerian Stock Exchange All Share Index (NGX ASI) appreciated by c.0.10% to close at 52,214.62 points, while year-to-date return settled at c 1.88%. While buying interest in ARDOVA (9.09%) and, NAHCO (3.50%) supported the market, selling interests in UNILEVER (-4.38%) and PZ (-3.10%) caused the pull back in today’s session. The NGX Banking, Industrial and Oil & Gas Indices appreciated in value today by 0.22%, 0.02%, and 1.36%, respectively. However, the NGX Consumer Goods Index depreciated in value by 0.13%. FIDELITYBK led both the volume and value charts with c. 942.77 million units and c. ₦ 5.52 billion, respectively.
Outlook: We expect the bullish sentiment to ease next week.
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate appreciated to ₦462.33/US$1.00 from ₦462.73/US$1.00 recorded yesterday.
Outlook: We expect the NAFEX rate to hover around $/₦462 levels next week.
Oil prices stabilized today, as market priced in positivism in United States-China economic relations. As of report time, Brent oil prices appreciated by c. 0.01% to $75.01 per barrel in intraday trade, while WTI appreciated by c 0.03% day-on-day to settle at US$70.89pb. Spot Gold declined by c. 0.18% day-on-day to close at US$2,016.90 per ounce as of report time.
Outlook: We expect volatility in oil prices to depress next week, barring any significant driver.