FIXED INCOME MARKETS
Money Market
The Open Repo Rate (OPR) increased by 52 bps to 31.10%, and the Overnight Rate (O/N) rose by 48 bps to 31.53%.
Outlook: We expect interbank rates to remain elevated tomorrow, in the absence of any major flows.
Treasury Bills
The activity in the Treasury bills market was mixed. Rates at the longer end of the curve increased ahead of tomorrow’s auction, while there was little buying interest at the middle of the curve. The average mid-rate decreased by 13 bps points to 18.79%.
Outlook: We anticipate a quiet session tomorrow as attention shifts to the NTB auction, where the DMO will offer T-bills worth approximately ₦161.88 billion.
FGN Bonds
The local FGN bonds market experienced a shift from bullish to bearish sentiment, as selling interest was observed across the curve, especially for the 2031s and May 2033 papers, which were trading above the 20% level. As a result, the average mid-yield rose by 23% to settle at 18.22%.
Outlook: We expect a similar trajectory tomorrow.
Equities
Today, the Nigerian stock market experienced a bullish session, as the NGX-ASI rose by 0.62% to 96,802.80 points. This resulted in a ₦343.03 billion increase in investor capital, reaching a total capitalization of ₦55.62 trillion. Notable drivers of the market’s performance were MTNN, OANDO, and ETERNA, contributing to a year-to-date ASI return of 29.46%. Transaction levels saw a decrease, with traded volume dropping by 48.28% while value rose by 22.05%. Sector performance was varied, with the Banking Index, Insurance, and Consumer Goods Indices facing losses, and the Industrial Goods and Oil and Gas Indices experiencing gains. Market breadth declined to 1.63x from 1.70x.
Outlook: We expect the bullish bias to persist.
Foreign Exchange
Naira depreciated against the USD by 3.61% to $/₦1,637.59.
Outlook: We expect volatility to persist.
Eurobonds
The Eurobonds Market continued to experience pessimistic trends in anticipation of the upcoming release of US CPI data. This data is expected to reinforce expectations of a possible 50bps rate cut. Most of the selling interests were in Nigeria and Angola. Consequently, the average benchmark yield increased by 8bps to 9.86%.
Outlook: The market’s focus will tilt to the US CPI data tomorrow.
Commodities
Crude oil futures hit their lowest levels since December 2021 after OPEC revised its demand forecast lower. Brent prices dropped 3.05% to $69.44, while WTI prices fell 3.49% to $66.31. Gold prices remained above $2,500 as market participants awaited U.S. inflation data for insights on potential interest rate cuts by the Federal Reserve.
Outlook: We expect the volatility to persist.
