President Bola Tinubu has approved the extension of the 2023 supplementary budget until March 2024, aligning it with the 2024 capital component. Speaker Tajudeen Abbas confirmed the decision and mentioned Tinubu’s approval of the N28.7 trillion 2024 appropriation bill. The extension allows concurrent operation with the 2024 budget until March 31. The initial enactment of the N2.17 trillion 2023 supplementary budget in November sparked controversy over specific allocations. Tinubu’s decision to securitize the N7.3 trillion Ways and Means debt balance aims to address borrowing concerns. The National Assembly sanctioned this move on December 30.
Money Market
Despite the central bank’s debit of N576.20 billion through the CRR, system liquidity remained notably stable throughout the week, ending at a considerable sum of N862.82 billion. Consequently, the Open Buy Back rate (OBB) experienced a 117 basis points decline in a week-on-week analysis, settling at 14.25%. Concurrently, the Overnight rate (O/N) saw a significant 80 basis points drop, concluding at 14.90%.
We expect rates to hover around similar levels next week.
Treasury Bills
The treasury bills market saw a bullish trend this week, primarily due to strong system liquidity levels, driving interest toward longer-dated maturities. As a result, the average benchmark yield decreased by 28 basis points, closing the week at 5.72%.
We activities to be skewed towards the NTB auction next week.
FGN Bond Market
The FGN market witnessed a bullish trend as various maturities garnered buying interest across the curve. This week, in contrast to the previous one, the average benchmark yield experienced a 39 basis points decline, reaching a closing rate of 14.15%.
We foresee cautious activity at the next trading session.
Eurobond Market
The Eurobond market traded with bearish sentiment for the most part of the week with selling activities seen on securities traded across board. As a result, the week witnessed a discernible impact on the average benchmark yield, which advanced by 81bps, eventually stabilizing at a closing rate of 10.38%.
We expect marginal buying activities in the next session.
Currency Market
The value of the Naira to the dollar appreciated by 1,665 bps to print at ₦869.39/$ this week at the Investors and Exporters FX Window.
Equities Market
The local stock market had a positive week, closing with the NGX All Share Index (NGXASI) surging by 211 basis points in a single day to hit 71,541.74 points. This marked a 654 basis points increase from the previous week. The upturn was primarily driven by heightened interest in banking stocks like Wema Bank (+9.99%) and Access Corporation (+6.20%), as well as major players in the index such as MTN Nigeria (+4.97%), Dangote Cement (+1.59%), and Nestle (+8.73%). Year-to-date growth sits at 6.54%, with the market capitalization ending the week at ₦43.59 trillion. Market breadth, which measures advancing stocks against decliners, closed at 2.74x, with 52 stocks gaining ground against 19 declining.
Looking at trading metrics, total volumes traded saw a 9.30% decline, while the traded value increased by 28.38%, amounting to 892.68 million units traded at N14.33 billion.
Looking ahead, we anticipate similar activities in the upcoming trading session.
