Comercio Partners Weekly Markets Round-up

On the domestic front, President Bola Tinubu announced plans to submit the 2024 supplementary Appropriation Bill to Nigeria’s National Assembly, aiming to foster prosperity, development, and progress. This move follows the recent enactment of the N28.7 trillion 2024 Appropriation Bill. Tinubu emphasized collective efforts in nation-building and the importance of self-reliance over foreign aid. He acknowledged economic challenges like currency fluctuations and revenue instability impacting financial projections, prompting the need for a supplementary budget. This aligns with the International Monetary Fund’s recommendations to address potential wage increases for workers. The supplementary budget aims to adapt to current economic realities and ensure diligent budget implementation.

Money Market

Following the OMO auction settlement and NDF Maturity this week, system liquidity concluded the week at ₦80.71 billion. WoW, the Open Buy Back (OBB) rate and the Overnight (OVN) rate slid 331ps and 306bps to print at 29.09% and 29.94%, consecutively.

We expect rates to hover around current levels.

Treasury Bills Market

The Treasury Bills market traded on mixed sentiments this week with emphasis on the April and May bills. At the OMO auction, CBN offered and allotted ₦500 billion across the standard maturities with total subscription amounting to N903.73 billion. There was no sale for the short-dated tenor. However, the stop rates on the mid and long-dated tenors dropped by 10 bps and 15 bps, closing at 19.64% and 22.34%, respectively. Sequel to the auction, we saw heightened interest on the newly issued 27-May-bill with offers at 21.60% before retracing to 21.80% on the offer. We also saw decent demand on the 22 May bill which was quoted at 20.60/20.25%. In addition, the DMO released the Q3 NTB issuance calendar. Week-on-week analysis indicates a 43bps decline in the average benchmark yield, printing at 21.72%. 

We expect focus to be skewed to the PMA.

FGN Bond Market

The FGN local bond Market traded on a drab note with improved offers seen across the curve, particularly on the MAY 19.89% 2033 bond, the 19.30% APR 2027 bond and the 2049s at 19.90%,19.60% and 17.65%, respectively. Furthermore, trades were consummated on the new 2031 bond at 19.85% while firm bids were quoted at 19.90% on the FEB 2034 bond. Week-on-week, the average benchmark yield rose 2bps to 18.57%.

We expect a similar session.

FGN Eurobond Market

The FGN Eurobond market was off to a quiet start due to the U.S and U.K bank holiday. Bearish sentiments lingered from hawkish sentiments stemming from some FED speakers, but we saw a reversal of this trend following the United States Q1’24 GDP numbers (1.3% vs 1.3%) and core PCE data (2.8% VS 2.8% YoY), coming in as expected.  WoW, the average benchmark yields lost 13bps, settling at 9.62%.

We expect activity to be skewed to the ISM Manufacturing PMI data.

Currency Market

The value of the Naira to the dollar depreciated by 0.21% to print at ₦1485.99/$ this week at the Nigerian Autonomous Foreign Exchange Market Window.

Equities Market

Investors on the local bourse enjoyed a pleasant week as the ASI concluded the session in green territory with the ASI advancing 173bps week-on-week and 2bps day-on-day. The upbeat performance was largely driven by buying interest in Seplat Energy Plc, FBN Holdings, UBA and Dangote Sugar. Furthermore, the year-to-date return settled at 32.80% while market capitalization improved by ₦0.022 trillion to ₦56.18 trillion. Akin to market posture, this week recorded a total of 43 advancers and 25 decliners, causing market breadth to print at 1.72x. 

On the flipside, volume and value traded declined by 43.57% and 45.53% to 434 million units and ₦8.58 billion, accordingly. At the close of today’s trading session, Zenith Bank, Guaranty Trust Holding Corporation and Access Corporation headlined the value chart with respective values of ₦3.74 billion, ₦965.71 million and ₦746.72 million while Zenith Bank, AIICO Insurance, Access Corporation garnered the top volumes of 111.13 million units, 59.11 million units and 43.41 million units. 

We expect another positive session.