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| The Central Bank of Nigeria (CBN) conducted Open Market Operations (OMO) in April, selling N676.65 billion at a 21% interest rate to manage money supply. This action is aimed at preventing an oversupply of naira, which could lead to inflationary pressures, while also stabilizing financial markets and aligning monetary policy with economic objectives. The CBN utilized higher interest rates to attract investors and absorb excess liquidity from the financial system through OMO bills. The auction saw a strong turnout, particularly for the 97-day and 188-day bills, with subscriptions exceeding offerings. Despite conservative investor interest, the clearing stop rates were set at 19% and 19.50% for the respective bills, resulting in sales below the amounts offered. This indicates cautious market sentiment amidst efforts to manage liquidity and stabilize financial conditions. Money Market Despite the OMO auction settlement during the week, interbank rates dipped on a week over week note due to the buoyant liquidity position in the interbank system brought about by CBN inflows. Consequently, the Open Buy Back rate (OBB) and the Overnight rate (O/N) concluded at 22.11% and 23.00%, marking a decline of 518 bps and 521 bps, respectively. We anticipate that rates will remain at their current levels.   Treasury Bills Market The Treasury Bills Market started the week with increased buying interest on the Mar-2025 papers. However, the market sentiment shifted to bearish following the results of the OMO PMA. At the auction, the CBN offered N500 billion across three maturities, leading to a total subscription of ₦1.19 trillion, with N676.55 billion allotted in total. Stop rates closed at previous levels of 19.00%, 19.50%, and 21.125%. As a result, the average benchmark yield increased by 55 bps week-over-week, settling at 19.05%. We anticipate a similar bias during the next trading session.               FGN Bond Market In contrast to the activity witnessed in the Treasury bills market this week, bullish sentiments prevailed in the FGN Bonds market. This was despite the release of the Q2 Bonds Auction calendar, which indicated the DMO’s intention to introduce a new bond – the 2029 bond – and reopen the 2031 and 2034 bonds, with an expected offer size ranging between ₦100-200 billion. The average benchmark yield experienced a decrease of 11 bps, concluding the week at 19.18%. We anticipate a continuation of this trend in the upcoming trading session. FGN Eurobond Market This week, the FGN Eurobond market experienced a mix of sentiments influenced by various reports from the US. Particularly noteworthy was the US ISM Manufacturing PMI report for March, which disclosed an uptick to 50.30, diverging from both anticipated figures and the preceding reading of 48.8 and 47.8, respectively. Furthermore, the US ISM Services PMI report for March also deviated from its projected value of 52.70, settling at 51.40. As the week drew to a close, the NFP and Unemployment data for March stood at 303k and 3.80%, respectively, in contrast to anticipated figures of 200k and 3.90%. Consequently, the average benchmark yield witnessed a WoW increase of 14 bps, reaching 9.41%. We anticipate this trend to persist. Currency Market The value of the Naira to the dollar strengthened by 446 bps week-on-week to print at ₦1,251.05/$ this week at the Nigerian Autonomous Foreign Exchange Market Window (NAFEM).      Equities Market In the weekly review, the local stock market primarily demonstrated a bearish trend, with the NGX All-Share Index witnessing a 29-bps decrease day-on-day (DoD) and a 103-bps decline week-on-week (WoW), closing at 103,437.67 points. Consequently, the year-to-date growth recorded a rise of 38.33%, while the market capitalization fell by ₦0.623 trillion WoW to reach ₦58.497 trillion. Upon closer examination, the weekly market breadth was at 0.76x, indicating 41 stocks on the decline compared to 31 advancing ones. When analyzing trade data on a WoW basis, the overall trading volume surged by 310.91% to 2.24 billion units, and the total traded value had a 28.16% increase, ending at ₦18.73 billion. Week-to-date (WTD), the most actively traded stocks in terms of volume and value were ABBEYBDS with 1.40 billion units traded, amounting to ₦3.08 billion, followed by ZENITHBANK with 62.58 million units traded valued at ₦2.77 billion, and GTCO with 84.65 million units traded valued at ₦4.48 billion. |
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