Money Market
Interbank liquidity improved sharply today, turning positive after the credit of c.₦813.25 billion OMO maturities. Consequently, interbank rates eased, with the Overnight Policy Rate (OPR) dropping by 2.40% to 30.00% and the Overnight Rate (O/N) falling by 2.33% to 30.57%.
Outlook: Tomorrow’s FGN bond auction settlement of c.₦910 billion will drain interbank liquidity, likely pushing rates back to elevated levels around 32.5%.
Treasury Bills
The Treasury Bills market showed a bullish tone today despite tight liquidity conditions. The long-end bills, especially the January and February maturities, attracted the most interest. Limited offers were observed as some players aimed to capitalize on market levels, resulting in only a few trades being executed. Overall, the average mid-rate for benchmark NTB papers closed at 18.01%.
Outlook: We anticipate the market will maintain a slightly bullish tone.
FGN Bonds
The local bonds market saw heightened activity driven by post-auction demand from investors who missed out and turned to the secondary market to fill their lost orders. At the auction, the DMO offered ₦350 billion, divided between the April 2029 (₦200 billion) and February 2031 (₦150 billion) papers. However, total allotments reached c.₦910.39 billion, with the 19.30% FGN APR 2029 and 18.50% FGN FEB 2031 papers allotted at marginal rates of 19.20% and 19.33%, respectively. Post-auction interest was particularly strong on the mid-tenor papers, including the April 2029s, February 2031s, February 2034s, and January 2035s. Overall, the average mid-yield closed at 18.31%.
Outlook: We anticipate the mixed to bullish sentiment to continue in the near term.
Eurobonds
The Eurobond market saw mixed to bearish sentiment today, influenced by geopolitical tensions and tariff discussions. While the Nigerian curve showed modest recovery by the close, the Angola and Egypt curves remained slightly bearish. Overall, the average mid-yield for benchmark Nigerian Eurobonds ended at 8.95%.
Outlook: We anticipate a slight rebound in tomorrow’s session.
Nigerian Equities
The Nigerian equities market extended its bearish run as the All-Share Index (ASI) declined by 32bps, bringing the year-to-date (YTD) gain to 4.72%. SMURFIT (+10%) led the gainers, while HONYFLOUR (-10%) topped the losers. ACCESSCORP recorded the highest volume at 36.85 million shares, while ARADEL led in value at ₦1.59 billion. Market breadth remained negative, with 49 stocks declining against 13 gainers. The NGX Banking Index lost 56bps, weighed down by WEMABANK (-1.64%) and FIDELITYBK (-1.1%). The Consumer Goods Index dropped 22bps, dragged by HONYFLOUR (-10%) and CHAMPION (-8.98%). The Oil & Gas Index fell 104bps due to OANDO (-9.72%), while the Industrial Goods Index edged down 2bps. Trading activity saw a 9.85% increase in value to $6.72m, with notable block trades including 11m ACCESSCORP at ₦25.65 and 14.7m GUINNESS at ₦74. Despite the losses, most price declines were marginal.
Outlook: We expect mixed sentiments in tomorrow’s session.
Foreign Exchange
The Nigerian Foreign Exchange Market (NFEM) maintained stability, with trading rates ranging between $/₦1,495.00 to $/₦1,505.00. Overall, the naira strengthened by 8 bps to$/₦1,495.91.
Outlook: We expect the Naira to hold steady within its current trading range.
Commodities
Oil prices dropped over 2% to a two-month low following weak economic data from the U.S. and Germany, compounded by concerns over President Donald Trump’s tariff policies. Brent crude declined $1.61 (2.25%) to $73.17 per barrel by 10:34 a.m. EST (1534 GMT), while U.S. WTI fell $1.60 (2.3%) to $69.10. Meanwhile, gold prices retreated as investors took profits after a record high, though trade war fears continued to drive safe-haven demand. Spot gold slipped 0.6% to $2,934.99 an ounce as of 09:55 a.m. (1455 GMT), after peaking at $2,956.15.
Outlook: The market is awaiting U.S. oil inventory data, with reports expected from the Energy Information Administration (EIA) on Wednesday.
