Strong Liquidity, Bullish Fixed Income, Equities Rally
System liquidity rebounded strongly during the week, shifting from a prior deficit to a sustained surplus that closed at ₦2.57 trillion. This improvement was driven by heavy placements at the CBN’s Standing Deposit Facility, sizeable OMO and NTB maturities, and bond coupon inflows, despite outflows from NTB settlements. As liquidity conditions improved, funding rates eased sharply, with average funding cost declining by 356bps week-on-week, reflecting lower overnight and repo rates
In the fixed income market, Treasury bills traded on a calm-to-bullish note, supported by ample liquidity and favourable auction outcomes. The 364-day NTB stop rate declined sharply, triggering broad-based yield compression across short, mid, and long tenors, with the average benchmark rate falling by 63bps. FGN bonds also benefited from spillover demand, particularly in the short to mid segment, leading to a 23bps w/w decline in average benchmark yields despite intermittent profit-taking.
Equities posted a strong performance, with the NGX All-Share Index rising 3.8% week-on-week, driven by gains in large-cap stocks across the Oil & Gas, Industrial Goods, and Banking sectors. In the external sector, the naira strengthened w/w on the back of foreign inflows and improved reserves, while commodities were mixed, with oil recording weekly losses and gold rallying strongly on safe-haven demand
