In February 2024, Nigeria experienced a significant uptick in headline inflation, reaching 31.70%, marking a 1.80% increase from January 2024. Compared to February 2023, this represented a stark 9.79% surge in the inflation rate. Notably, month-on-month inflation also rose to 3.12%, surpassing January’s rate of 2.64%, indicating a faster pace of price increases. Food inflation surged to 37.92%, with notable price hikes in bread, cereals, potatoes, yams, fish, coffee, tea, and cocoa, marking a substantial increase from February 2023. Similarly, core inflation, excluding volatile agricultural products and energy costs, rose to 25.13%, driven by notable increases in transport, housing rentals, medical services, and pharmaceutical products. Urban and rural areas both witnessed significant inflationary pressures. Urban inflation rose to 33.66%, while rural inflation reached 29.99%, both substantially higher than the previous year. Month-on-month increases were observed in both urban and rural areas, indicating widespread inflationary pressures across the country.
https://www.digital.zenithbank.com/ZEQ/ZEQ-jan-2026/index.html#p=1Money Market
Interbank rates rose on a week-to-week basis owing to the diminished system liquidity. The Open Buy Back (OBB) climbed by 47 bps compared to the previous week, reaching 30.29%, while the Overnight rate (O/N) saw a 7 bps increase, ending the week at 31.07%.
We anticipate a slight uptick in rates next week, driven by the anticipated settlements from Bonds auctions.
Treasury Bills Market
The Treasury Bills market started the week cautiously, with limited interest observed on the longer end of the curve due to constrained liquidity in the interbank market. This cautious sentiment persisted, compounded by the anticipation of a NTB auction mid-week. During the auction, the DMO offered and allotted a total of N161.49 billion against a total subscription of N1.49 trillion. Compared to the previous auction, stop rates decreased across the offered papers, closing at 16.24%, 17.00%, and 21.123%, representing declines of 100 bps, 100 bps, and 7 bps, respectively. Following the auction results, the Treasury bills market traded with a mild bullish bias, with interest particularly focused on the Feb-2025 and Mar-2025 papers as the secondary market absorbed the unmet demand from the primary market auction. Consequently, the newly issued one-year paper (13-Mar-25) traded around the 19% mark against its stop rate. However, the average benchmark yield saw a marginal decrease of 1 bp, ending the week at 18.97%.
We expect a cautious stance at the upcoming session.
FGN Bond Market
The FGN Bonds market displayed a bearish stance for most of the week because of the depressed interbank market liquidity. Consequently, the average benchmark yield concluded the week at 18.48%, marking an 8-bps increase on a week-over-week (WoW) basis.
We anticipate a cautious mode as participants position ahead of the bonds auction on Monday.
FGN Eurobond Market
The FGN Eurobonds market experienced mixed sentiment throughout most of the week. However, prices declined on a week-on-week basis due to two main factors: the announcement of a forthcoming Eurobond issuance by the Nigerian government before June and the rise in Nigeria’s Consumer Price Index (CPI) to 37.10% for February, up from 29.90% in January. As a result, the average benchmark yield increased by 34 bps compared to the previous week, ending the week at 9.96%.
We anticipate a continuation of this trend in the upcoming week.
Currency Market
The value of the Naira to the dollar appreciated by 151 bps week-on-week to print at ₦1,602.75/$ this week at the Nigerian Autonomous Foreign Exchange Market (NAFEM).
Equities Market
The local equities market concluded the week on a positive trajectory as the NGX All-Share Index (NGXASI) recorded a day-on-day increase of 99 bps and a week-on-week rise of 371 ps, settling at 105,085.25 points. This optimistic sentiment, driven by heightened buying interest in prominent stocks such as MTN Nigeria Communications, Guaranty Trust Holdings Company, and Zenith Bank, among others, reflects a year-to-date growth of 40.54%. Evaluating the overall weekly performance, market breadth stood at 2.25, indicating that 54 advancers outpaced the 24 decliners, while market capitalization surged by ₦582 billion, concluding the week at ₦59.41 trillion.
Analyzing the trading metrics for the week, it was observed that total trading volume decreased by 39.35% week-on-week, reaching 217.21 million units, and the total traded value plummeted by 74.82% week-on-week, totaling ₦5.00 billion. FBNH, GTCO, and TRANSPOWER emerged as the volume leaders, with total closing values of 2.10 billion units, 1.42 billion units, and 1.41 billion units, respectively. Meanwhile, Transnational Power, GTCO, and Transnational Corporation of Nigeria topped the values chart with total closing values of ₦10.55 billion, ₦6.85 billion, and ₦5.00 billion, respectively.
We anticipate a cautious approach in the next trading session.
