Nigeria recorded $282.61 million in diaspora remittances in Q1 2024, a 6.28% drop from Q1 2023’s $301.57 million. January 2024 saw a significant rise to $138.56 million compared to January 2023’s $79.19 million. However, February 2024’s remittances fell sharply to $39.15 million from $83.76 million in February 2023. March 2024 also saw a decline to $104.91 million from $138.63 million in March 2023. The Central Bank of Nigeria (CBN) introduced reforms, including approving 14 new international money transfer operators (IMTOs) and revising guidelines to increase formal remittance flows and stabilize the exchange rate.
In April 2024, the Consumer Price Index (CPI) for the U.S. rose by 0.3%, marking a slight increase in inflation compared to previous months. Over the past 12 months, the CPI increased by 4.9%, showing a continuation of the downward trend in inflation, but still above the Federal Reserve’s target rate of 2%. The food index experienced a monthly rise of 0.9%, driven largely by increases in grocery store prices. Meanwhile, the energy index saw a decrease of 2.7%, with gasoline prices dropping by 6.1% in April. Core CPI, which excludes food and energy prices, also rose by 0.4% in April, maintaining the same rate as in March. Key contributors to this increase included higher costs for shelter, used cars and trucks, and motor vehicle insurance. Overall, while inflationary pressures persist, recent data suggests that the Federal Reserve’s measures are gradually taking effect, helping to moderate price increases. However, the journey to reach the desired inflation rate remains ongoing.
Money Market
Interbank market liquidity remained in negative territory for most of the week following the bonds auction settlement debit amidst other bank obligations. Consequently, the Open Buy Back rate (OBB) rose by 196 bps WoW to end at 29.96%, while the Overnight rate (O/N) rose by 205 bps WoW to conclude at 30.68%.
We anticipate that rates will remain at their current levels.
Treasury Bills Market
The Treasury Bills Market traded mixed sentiments with increased activities geared towards the mid-to-long dated maturities, particularly the 10-Apr-25 bill. Despite the slim liquidity, the average benchmark yield dipped by 8 bps week over week, reaching a settlement of 22.37%.
We anticipate a calm start to the next trading session.
FGN Bond Market
The FGN Bonds market opened on a calm mode in anticipation of the results of the bonds auction. At the auction, the DMO offered ₦450 billion across two re-openings- 2029 and 2031, and one new offer- 2033. Total subscription amounted to ₦551.32 billion with only allotted value of ₦380.77 billion. Surprisingly, stop rates closed at 19.29%, 19.74%, and 19.89% compared to previous auction stop rates on the 29s and 31s of 19.30% and 19.75 following this auction, improved interest was seen on the newly issued 33s and the 53 papers. Hence, the average benchmark yield increased by 3 bps WoW, ending the week at 18.57%.
We anticipate a continuation of this trend in the upcoming trading session.
FGN Eurobond Market
The FGN Eurobonds opened in a bullish mode following the US CPI data which dipped by 0.20% to 3.40% compared to the previous print of 3.60%. Despite this result, the FGN Eurobond market closed on a bearish mode as average benchmark yield increased by 2 bps week over week, settling at 9.53% as three FED speakers opted for higher-for-longer rates in their speech.
We anticipate this trend to persist.
Currency Market
The value of the Naira to the dollar weakened by 212 bps week-on-week to print at ₦1,497.33/$ this week at the Nigerian Autonomous Foreign Exchange Market Window (NAFEM).
Equities Market
This week, the local stock market primarily demonstrated a bearish trend in 4 out of 5 trading sessions. The NGX All-Share Index increased by 3-bps day-on-day (DoD) and a 11-bps decline week-on-week (WoW), to settle at 98,125.73 points. Consequently, the year-to-date growth recorded a rise of 31.23% while the market capitalization dipped by ₦0.063 trillion WoW to reach ₦55.507 trillion. Upon closer examination, the weekly market breadth was at 0.57x, indicating 49 stocks on the decline compared to 28 advancing ones.
When analyzing trade data on a WoW basis, the overall trading volume dropped by 59.12% to 140.77 million units, while the total traded value had a 25.22% uptick, ending at ₦9.41 billion. Week-to-date (WTD), the most actively traded stocks in terms of volume were Guaranty Trust Holding Company, Access Corporation, and Nigerian Breweries with total trades amounting to 167.09 million units, 150.25 million units, and 121.42 million units respectively. In terms of value, the most traded stocks WTD were Guaranty Trust Holding Company, Airtel Africa, and Notore Petrochemicals with total value amounting to ₦6.99 billion, ₦6.66 billion, and ₦4.65 billion, respectively.
