FIXED INCOME MARKETS
Money Markets
Opening system liquidity declined to a balance of c.₦197.26 billion, compared to yesterday’s opening balance of c.₦233.84 billion. However, the Overnight Policy Rate (OPR) remained unchanged from yesterday’s rate at 10.50% while the Overnight Rate (O/N) declined to 10.81%, respectively compared to yesterday’s 10.86% respectively.
Outlook: We expect the market activity to be skewed towards the NTB auction next week.
Treasury Bills
The treasury bills market traded bearish in today’s session, as offers skewed more at the long end of the curve, particularly 7 March 2024. Average yield expanded by 78bps to 4.33%.
Outlook: We expect the market activity to be skewed towards the NTB auction next week
FGN Bonds
The local bonds market was slightly bullish today, with buyside interest mostly seen at the long end of the curve, particularly 2049 and 2050 papers. Nonetheless, average mid-yield inched up by 1bp to close at 13.40%.
Outlook: We expect a similar performance next week
Eurobonds
The US job market report drove further bearishness and nailed the cross for more policy tightening today, as the US Nonfarm payroll printed at 311k, which surpassed the 225k estimate. One may also argue that with unemployment rate inching upwards to 3.60%, it presents a case for a softening stance by the US Fed.
The Nigerian curve however took a different route, with some positive sentiment on the back of rebound in crude oil production output. Overall, the average yield declined by 13bps to 12.09%.
Outlook: We expect the market to be swerved by the US CPI data next week.
Equities
The Nigerian bourse closed on a negative note today, as the Nigerian Stock Exchange All Share Index (NGX ASI) decreased by c. 0.05% to close at 55,794.51 points while year-to-date return closed at c.8.87%. Selling interest in UBA (-0.15%), ZENITHBANK (-0.2%) and GTCO (-0.05) drove the bearish theme that was recorded today. The NGX Industrial Goods, Consumer Goods, Banking and Oil &Gas Indices all depreciated in value by c. 0.01%, c. 0.04%, c. 0.56% and c. 0.54% respectively. TRANSCORP led the volume charts with c. 87.37 million units, while BUACEMENT led the value charts with c. ₦ 7.05 billion worth of trades.
Outlook: We expect a mixed market activity next week.
Foreign Exchange
FMDQ’s Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate depreciated to ₦ 461.50/US$1.00 from ₦ 461.00/US$1.00 recorded at the close of yesterday.
Outlook: We expect sustained FX pressures, CBN intervention and depreciation of the Naira
Commodities
Oil fell for a fourth session on Friday due to worries about the possible effect of major interest rate increases in the US on fuel demand, laying the way for its worst weekly drop in five weeks. Brent Crude Oil price decreased by c.0.74% day-on-day to settle at US$80.99pb, while WTI decreased by c.1.00% day-on-day to settle at US$74.96pb as at the time of this report. Spot Gold appreciated in value by c.0.14% day-on-day to close at US$1,837.10per ounce as of report time.
Outlook: We expect more swings in oil prices as hikes interest rest from the U.S looms.
