FIXED INCOME MARKETS
Opening System liquidity increased to c. ₦382.74 billion long, compared with the opening balance of ₦18.11 billion long, recorded yesterday. This was bolstered by FAAC inflows. Consequently, the Open Repo Rate (OPR) and Overnight Rate (O/N) declined to 11.00 and 11.50% respectively.
Outlook: We expect the interbank rates to cling to similar levels tomorrow, barring any significant flows.
The buyside interest lingered in the NTB market, as investors demanded for short-dated papers amid a potential announcement of a hike in monetary policy rate by the MPC and the NTB auction slated for tomorrow. The long end of the curve also witnessed buy interest, but not aggressively. Overall, the average mid-rate closed c.20bps lower to settle at 5.38%.
Outlook: We expect a quiet session tomorrow, as focus tilts to the MPC meeting and NTB auction where c.N180bn will be offered across the usual tenors.
The FGN bonds market endured a mixed to bullish theme with most of the interest skewed to 2026, 2028, 2032, 2042 and 2050 papers. However, the executed trades were few and far between. Thus, the average mid-yield dipped by c.18bps to settle at 13.89%.
Outlook: We anticipate this trend to persist tomorrow, barring any major catalyst.
The Eurobonds space sustained its bullish affair, with sizeable demand recorded across Nigeria and Angola. On the one hand, Ghana and Egypt endured a mixed theme amid the recent hold stance taken by the monetary policy authorities of both countries.
In other news, Nigeria hopes that the operations of the recently commissioned giant Dangote refinery will help eliminate a $26 billion foreign-exchange bill on the import of petroleum products and fertilizer.
Outlook: We expect the buyside activity to linger tomorrow.
The Nigerian equity market closed on a bullish note, as the Nigerian Stock Exchange All Share Index (NGX ASI) gained c.0.48% to close at 52,621.19 points, while year-to-date return settled at c 2.67%. Observably, buying interest in ZENITHBANK (0.55%), and GTCO (0.55%) drove the positive trend today. The NGX Banking, Industrial Goods, Consumer Goods and Oil & Gas Indices all appreciated in value by 1.55%, 0.02%. 0.35% and 0.04%.respectively. UBA led the volume charts today with c. 62.45million units, while ZENITHBANK led the value charts today with c. ₦ 1.58 billion.
Outlook: We expect the market to extend its bullish posture tomorrow.
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate depreciated to ₦464.42/US$1.00 from ₦463.50/US$1.00 recorded last week.
Outlook: We expect the NAFEX rate to hover at similar levels tomorrow.
Oil prices rose further on Tuesday, with investors expecting a tighter market due to seasonal increases in gasoline demand and production curbs from OPEC+ countries, however concerns about a U.S. debt default limited gain. As of report time, Brent oil prices appreciated by c. 0.34% to $76.25pb, day-on-day, while WTI appreciated by c 0.36% day-on-day to settle at US$72,31pb. However, Spot Gold depreciated by c. 0.66% day-on-day to close at US$1,964.20 per ounce as of report time.
Outlook: We expect Oil Prices to rise due to increase in demand for gasoline and tighter supplies.