Nigeria’s National Economic Council (NEC) recommended the withdrawal of the proposed tax reform bill to allow for broader stakeholder consultation and consensus-building. The Vice President emphasized that the reforms aim to diversify revenue and reduce dependency on specific sectors, while Governor Seyi Makinde of Oyo State highlighted the need for alignment among stakeholders due to misinformation around the bill. Meanwhile, the Northern Governors Forum, led by Governor Muhammed Inuwa Yahaya of Gombe, strongly opposed the bill’s derivation-based model for Value Added Tax (VAT) distribution, arguing it disadvantages the northern region. The Forum urged the National Assembly to reject any amendments that would undermine the North’s interests, particularly regarding VAT, which is currently remitted based on company headquarters rather than the consumption location.
Money Market
Market liquidity opened the day at ₦396.3 billion long. The Open Buy Back (OBB) rate and the Overnight (OVN) rate closed at 19.25% and 19.68%, respectively.
We expect rates to hover around current levels.
Treasury Bills Market
The FGN Treasury Bills Market traded on calm note this week with activity skewed to the 23 Oct bill with bids hovering at 20.40%. However, as the week drew to a close, this exchanged hands at 20.10%. There was demand on the 23 Jan NTB bid at 21.34% while offers were scarce. We saw the May maturities quoted 22.60/22.40 and the 10 April bill 23.10/22.95. Week on week, the average benchmark yield declined by 4bps to close at 24.53%
We expect no change to market sentiments.
FGN Bond Market
The FGN Bonds Market traded on a calm note with a bullish bias this week. We saw trades consummated as low as 21.00% on the 2031 maturity and 19.95% on the Feb 2034 bond. Furthermore, we saw the 33s trade 20.45% while the 2029 bond bid at 20.45% with little to no offers in sight. Week-on-week, the average benchmark yield appreciated by 18bps to close at 18.95%
We expect market sentiments to remain unchanged.
FGN Eurobond Market
The FGN Eurobonds Market traded on mixed sentiments this week. The bears and the bulls each had their turns but ultimately, it was a bearish close to the week. In addition, It was a data filled week from the U.S. Amongst that data included the United JOLTS Job Openings which printed at 7.443M vs 7.99M expected against 7.861M prev, indicating a further slowdown of the jobs market. The United States Q3 GDP data showed that the economy grew by 2.8% against 3% prior while the ADP employment change printed at 233k vs 130k predicted and 159k previous. Today, the NFP printed at 12K vs 106k predicted and 223k forecasted. Week-on-week, the average benchmark yield appreciated by 15bps to close at 9.54%
We expect investors to implore a cautious approach ahead of the United States elections.
Currency Market
The value of the Naira to the dollar declined by 417bps compared to the previous week, printing at ₦1666.72/$ to close the week at the Nigerian Autonomous Foreign Exchange Market Window (NAFEM).
Equities Market
The local bourse ended the day with the benchmark NGX All-Share Index (ASI) declining by 22ps to close at 97,432.02. Market capitalization also decreased, closing at ₦59.04 trillion. Market breadth was negative at 0.77x, with 23 stocks advancing and 30 declining. This performance was driven by gains in JOHNHOLT (+10.00%), EUNISELL (+9.98%) and REDSTAREX (+9.83%), and losses in ARADEL (-10.00%), ELLAHLAKES (-9.92%), and MULTIVERSE (-9.66%).
Trading activity was robust on the day, with the volume of shares traded increasing by 66.87% to 888.01 million units, while the total value of shares traded increased by 79.20% to ₦15.84 billion. The most actively traded stocks by volume were FIDELITY with 540.82 million units, JAIZBANK with 68.72 million units, and CHAMS with 49.39 million units. In terms of value, FIDELITY led with ₦7.69 billion, followed by ARADEL at ₦2.30 billion, and ZENITH ₦1.65 billion.
Reflecting the day’s performance, the NGX All-Share Index reflected a 1-week decline of 1.77% and a 4-week decline of 1.14%, with an overall year-to-date gain of 30.30%. Other notable indices are the NGX Top 30 Index (+0.18%; -0.97% 1WK; +31.74% YTD), NGX Banking Index (+1.15%; +0.95% 1WK; 11.81% YTD), and NGX Oil & Gas Index (-0.07%; +1.28% 1WK; +121.06% YTD).
