FIXED INCOME MARKETS
Money Market
Opening system liquidity declined by 82.65% to ₦46.67 billion from yesterday’s ₦269.08 billion. Accordingly, the Open Repo Rate (OPR) and Overnight Rate (O/N) widened by 952bps to 14.15% and 840bps to 15.40%, respectively.
Outlook: We expect the interbank rates to stay elevated in the short-term.
Treasury Bills
The treasury bills market was quiet today, as attention shifted to the NTB auction. Surprisingly, the CBN also issued OMO bills across the 97-Day (N75bn), 181-Day (N75bn) and 363-Day papers (N150bn) at 10.50% (N22bn), 14.00% (N35.20bn) and 17.75% (N300bn), respectively with a total allotment of N357.20 billion. Nevertheless, the average mid-rate remained unaltered at 4.64%.
Outlook: We expect the market sentiment to tilt to the bears in the interim.
FGN Bonds
The FGN local bonds market started on a calm note, due to the notice of OMO bills auction today. Afterwards, offers improved slightly, with sell interests, particularly at the short-dated region following the OMO Bills auction result. Consequently, the average mid-yield stayed at 13.96%.
Outlook: We expect activity to stay bearish in tomorrow’s session.
Eurobonds
Today’s Eurobonds market nudged further into a bullish territory, as several buyside interests revolved along the curve of African papers ahead of tomorrow’s consumer price index data. Consequently, the Nigerian Eurobonds paper closed bullish as average mid-yield declined by 19bps to settle at 9.97%.
Outlook: We expect US inflation data to spark volatility in tomorrow’s session. As of writing, market expect US CPI to expand by 3.20% y/y from 3.10%, and 0.20% m/m from 0.10% in November.
Equities
Nigerian Equity market eased its bullish rally with selloffs that led the ASI to fall by 1.40%, settling at 81,024.38 points, while YTD return settled at +9.70% with a total market capitalization of ₦44.89 trillion. Market was characterised by profit taking across several tickers, with sizeable selloffs observed on banking stocks, especially the tier 1 banks. Activity was positive with 16.42% increase in total volume and a 2.82% rise in total value traded.
TRANSCORP topped the volume chart with 117.64 million units, while GTCO led in value at ₦3.28 billion. The Banking and Oil & Gas Indices depreciated by 7.79%, and 0.40%, respectively, while the Industrial and Consumer Goods gained loss 1.39% and 2.45%, respectively.
Outlook: We expect the bullish bias to linger.
Foreign Exchange
FMDQ’s Nigeria’s Autonomous Foreign Exchange (NAFEM) appreciated by 0.66% (or ₦7.19) to $/₦1,082.32 from $/₦1, 089.51 recorded yesterday.
Outlook: The volatility is expected to persist in the interim.
Commodities
Oil steadied today, giving up most of its earlier gains, as Middle East supply concerns arising from the Israel-Hamas war and the shutdown of a top Libyan oilfield balanced rising U.S. output and worries about weak economic growth. Brent crude was reported at $78.43 per barrel, and West Texas Intermediate (WTI) at $73.25 per barrel, as at printing time. Gold prices increased to $2,033.30 per ounce from the previous day, as of printing time.
Outlook: We expect oil prices to hover around $70 pb levels in the interim.
