FIXED INCOME MARKETS
Money Market
Opening system declined by 50.55% to ₦198.79 billion today, compared to ₦402.00 billion reported yesterday. Consequently, the Open Repo Rate and Overnight Rate increased by 46bps and 57bps to 16.71% and 17.50%, respectively.
Outlook: We expect rates to expand tomorrow amid the FGN bond auction funding.
Treasury Bills
The treasury bills market posted a bullish sentiment in today’s session, with most buyside interests seen at the belly and long end of the curve. Towards the end of the session, activity eased, and market settled on a relatively bullish note. As a result, average mid-rate declined marginally by 1bp to 13.97%.
Outlook: We expect activity to be tilted towards the NTB auction tomorrow as the DMO would be offering ₦265.50 billion.
FGN Bonds
The FGN bond secondary market saw subdued activity today, with investors’ attention primarily directed towards the outcome of the FGN bond auction. Following the release of the auction results, which saw the DMO offer ₦2.5 trillion worth of bonds but sold c.₦1.49 trillion across two maturities (2031s and 2034s) with a subscription of c.₦1.9 trillion, the market experienced mixed sentiments afterwards. Yields adjusted across the surrounding tenors, with late buyside interest noted in the newly issued 2034 paper. Overall, the average mid-yield expanded by c.31bps to settle at 16.94%.
Outlook: We expect the bond auction result to impact the direction of the market tomorrow.
Eurobonds
Activity in the Eurobonds market started calm, although, sentiments were tossed bearish across major African papers in the second half of the session. Overall, Nigeria’s average mid-yield increased by 16bps to close at 9.75%.
Outlook: We expect market to trade cautiously ahead of the release of the minutes of the last FOMC meeting.
Equities
Despite the buying interest on GEREGU (+3.68%), the bearish bias on BUACEMENT, FBNH and TRANSCORP precipitated the overall bearish sentiment in the market. Thus, the ASI lost 1.30%, to settle at 101,060.67 points while the year-to-date return settled at c.35.16% and total market capitalization was valued at ₦55.30 trillion.
Trading activity was negative, with -6.46% and -10.90% decline in the total volume and value traded, respectively. Further, TRANSCORP led the volume chart with 39.75 million units while GEREGU led the value charts with ₦1.11 billion. The Banking, Industrial and Consumer Goods Indices shed 2.37%, 3.62% and 0.87%, respectively, while the Oil & Gas Index increased by 0.21%.
Outlook: We expect a similar momentum tomorrow.
Foreign Exchange
FMDQ’s Nigeria’s Autonomous Foreign Exchange (NAFEM) appreciated by 2.96% (or ₦47.30) to $/₦1,551.24 from $/₦1,598.54 recorded yesterday.
Outlook: We expect the volatility to persist.
Commodities
The conflict in the middle east continues to impact the oil prices. Brent crude reached $83.24 per barrel, while West Texas Intermediate (WTI) stood at $79.77 per barrel at the time of reporting. The price of gold increased to $2,039.90 per ounce at the same time.
Outlook: We expect geopolitical tensions to continue to weigh on crude oil prices.
