Nigeria’s crude oil production inched higher to 1.401mbpd in October, slightly above the 1.39mbpd recorded in September, according to OPEC’s latest Monthly Oil Market Report. Despite the uptick, Nigeria again fell short of its OPEC quota for the third straight month, underscoring persistent operational headwinds that have kept output below target since July. OPEC data shows production averaged 1.444mbpd in Q3, down from 1.481mbpd in Q2, reflecting ongoing difficulties sustaining recovery despite new upstream investments and government interventions. The global context also shifted in October, with oil supply outpacing demand by 500kbpd, reversing the 400kbpd deficit recorded a month earlier. OPEC attributed the surplus largely to higher non-OPEC output, particularly an additional 890kbpd from global producers, over half contributed by the United States. Amid these challenges, Nigeria is pushing for a higher OPEC quota, with the Minister of State for Petroleum (Oil), Senator Heineken Lokpobiri, signalling plans to request an increase to 2mbpd from the current 1.5mbpd. Lokpobiri maintains that new rigs, reactivated fields, and renewed IOC investment have strengthened capacity. However, persistent constraints. including vandalism, oil theft, deteriorating infrastructure, and financing bottlenecks, continue to cap output well below the pre-2020 level of 1.8mbpd.
Money Market
System liquidity remained buoyant throughout the trading week, opening at ₦3.84 billion on Monday and closing at ₦3.62 trillion. Week-on-week, the Open Buy Back (OBB) remained steady to close at 24.50%, while the Overnight (OVN) rates increased by 6bps to close at 24.92%.
We expect rate to continue to hover around this level.
Treasury Bills Market
The Treasury Bills market traded largely on a calm to bullish note throughout the week, with investors steadily cherry-picking maturities across the curve amid persistent interest in the long end. Early in the week, activity was centred on the November 5 bill, which consistently dominated trading with executions at 15.55%, 15.50%, and later 15.35% as buying momentum strengthened. Sentiment remained constructive, supported by selective demand in the OMO segment, where the December maturity was offered at 21.50%. Mid-week, the bullish trend was tempered by an OMO auction announcement, in which the CBN offered ₦300bn each on the 152-day and 173-day bills; the auction drew robust demand with ₦3.09trn in subscriptions and ₦2.54trn allotted, while the 173-day stop rate declined sharply by 114bps to 20.69%, further anchoring the positive tone. The market closed the week quietly, with softer activity on the mid- to long-dated NTB maturities but overall sentiment remaining stable. Week-on-week, the average benchmark yield declined by 39bps to close at 17.00%.
We expect a quiet start, as market participants begin to position ahead of Wednesday’s auction.
FGN Bond Market
The FGN Bonds market traded mixed through the week, beginning on an active note with pockets of demand concentrated in the mid-tenor segment, where trades on the 2033s were executed at 15.50% and the 2032s quoted at 15.70%/15.50%. Momentum strengthened mid-week as bullish interest resurfaced on the mid-end of the curve, pushing 2033 yields lower to 15.30% and the 2032s firmer at 15.35%/15.20%. This was followed by a mild pullback as profit-taking emerged, nudging the 2032 paper higher to 15.45%/15.30%. Later in the week, trading turned cautious ahead of the OMO auction results, keeping yields stable with the 2032s steady at 15.45%/15.35%. The market closed the week on a quiet note, with yields largely unchanged across the curve. Week-on-week, the average benchmark yield declined by 15bps to close at 15.50%.
We expect a cautious start, with yields likely to hover within the current range ahead of October’s inflation print.
FGN Eurobond Market
The Eurobond market began the week on a bullish footing, supported by optimism around a potential resolution to the prolonged U.S. government shutdown, with sentiment further lifted after the U.S. Senate advanced a key compromise bill that drew bipartisan support. Momentum softened the following session due to the U.S. bank holiday for Veterans Day, leading to muted activity and a mixed yield close. Mid-week, renewed optimism resurfaced following the official reopening of the U.S. government, sparking another wave of buying interest and driving yields lower across the curve. However, sentiment reversed sharply after the White House signaled that October Jobs and CPI data were unlikely to be released, dampening risk appetite and pushing yields higher. The week closed on a bearish tone as fading expectations of near-term rate cuts pressured the market, though late-session buying interest provided a mild intraday reversal. Week-on-Week, the average benchmark yield declined by 24bps to 7.64%.
We look forward to FOMC Meeting Minute and the release of key U.S. data releases, NFP and Flash PMI.
Currency Market
The value of the Naira to the dollar declined by 0.41% to close at ₦1442.43/$ at the Nigerian Foreign Exchange Market Window (NFEM).
Equities Market
The local bourse ended the day with the benchmark NGX All-Share Index (ASI) depreciating by 0.09% to close at 147,115.63. Market capitalization also decreased, closing at ₦94.41 trillion. Market breadth was positive at 1x. Meanwhile, trading activity was mixed on the day, as the volume of shares traded improved by 12% to 671.43 million units, while the total value of shares traded decreased by 8% to ₦20.90 billion.
Reflecting the week’s performance, the NGX All-Share Index recorded a 1.61% depreciation, as gains in NCR (NIGERIA) PLC (+32.30%), ASOSAVINGS (+14.40%) and CHAMPION (+11.54%) were offset by declines in UNIONDICON (-18.71%), AUSTINLAZ (-18.62%), and MULTIVERSE (-14.47%).
Overall, the NGX has posted a year-to-date gain of 42.93%. Other notable indices are the NGX Top 30 Index (+0.07%; -1.65% 1WK; +41.42% YTD), NGX Banking Index (-1.40%; +0.28% 1WK; 31.64% YTD), NGX Oil & Gas Index (+0.09%; +0.01% 1WK; +2.26% YTD), and NGX Insurance Index (-0.05%; +0.39% 1WK; 61.92% YTD).
