FIXED INCOME MARKETS
Money Market
Opening system liquidity increased further by 67.37% from ₦262.70 billion yesterday to ₦439.68 billion today. Hence, the Open Repo Rate contracted by 82bps to 14.79%, while the Overnight Rate fell by 83bps to 15.46%.
Outlook: We expect rates to hover at similar bands tomorrow.
Treasury Bills
Today’s session in the treasury bills market was characterised with weak volatility, given the cautious interest amongst participants, particularly on the long-dated papers. Although, some cherry-picking activity was noticed on selected papers, especially the 06-Feb 2025. As a result, market closed bullish, as the average mid-rate declined by c.24bps to close at 14.72%.
Outlook: We expect market to exhibit a mixed-to-bearish theme in the interim.
FGN Bonds
The local bonds market traded calmly, with few sideway interests around the short- and medium-term papers. Specifically, the 2027 and 2038 papers witnessed more traction while the 2053 maturity saw mild activity. At the closing bell, market closed bearish as average mid-yield increased by c.3bps to 16.59%.
Outlook: Given the FGN bond calendar released today (see attachment), we expect the bearish trajectory to intensify with higher yields across the short to mid tenors.
Eurobonds
In the Eurobonds market, the session started lethargic, due to the absence of significant jitters. Subsequently, market posted a bearish posture, albeit, at a less aggressive pace. Consequently, Nigeria’s average mid-yield soared by 8bps to close at 9.81%.
Outlook: We expect tomorrow’s trend to be slightly impacted by a slew economic data scheduled for release tomorrow, including Jobless Claims, Retail Sales amongst others.
Equities
The Nigerian equity market partly recovered previous losses today, following demands for AIRTELAFRI (+10.00%), FBNH (+9.90%), SEPLAT (+9.61%), GEREGU (+6.72%) and UBA (+4.80%). However, the selloffs in BUACEMENT (-9.91%) and FIDELITYBK (-9.65%) dwarfed the overall gains. At the end of trading, market closed bullish with 1.76% uptick in the All-Share Index (ASI), to settle at 103, 498.28 points while the year-to-date return settled at c.38.42% and total market capitalization was valued at ₦56.63 trillion.
Consequently, trading activity was positive, with +62.19% and +181.51% increase in the total volume and value traded, respectively. Further, FBNH led the volume chart with 54.61 million units while GEREGU led the value charts with ₦2.50 billion. The Banking, Consumer Goods, and Oil & Gas Index increased by 2.01% , 3.99%, and 5.34%, respectively, while the Industrial Goods Index lost 3.54%.
Outlook: We expect a similar momentum tomorrow.
Foreign Exchange
FMDQ’s Nigeria’s Autonomous Foreign Exchange (NAFEM) depreciated by 3.83% (or ₦57.47) to $/₦1,556.54 from $/₦1,499.07 recorded last yesterday.
Outlook: We expect the volatility to persist.
Commodities
Crude oil rose today as geopolitical tension heightens. Brent crude reached $82.68 per barrel, while West Texas Intermediate (WTI) stood at $77.71 per barrel at the time of reporting. Gold prices extended declines today, on the back of investors to pull back on bets of rate cuts by the Federal Reserve. The price of gold fell to $2,001.70 per ounce at the same time.
Outlook: We expect geopolitical tensions to continue to weigh on crude oil prices.
