Nigeria successfully raised $900 million through its first-ever domestic dollar bond sale, which was oversubscribed, signaling strong investor confidence in the country’s economic prospects. The five-year bond, issued at a 9.75% coupon, targeted local investors, pension funds, and the Nigerian diaspora, providing a valuable source of hard currency amid ongoing dollar shortages and naira devaluation pressures. This bond issuance, considered a landmark transaction, reflects Nigeria’s strategy to diversify funding sources and reduce reliance on international markets where borrowing costs are higher. The proceeds are expected to support critical sectors of the economy, with plans to list the bond on local exchanges to enhance tradability.
Money Market
Market liquidity opened the day at ₦503.25 billion short. The Open Buy Back (OBB) rate and the Overnight (OVN) rate closed at 31.20% and 31.73%, respectively.
We expect rates to hover around current levels.
Treasury Bills Market
The FGN Treasury Bills Market saw quite a quiet week. At the onset, we saw the 2 Sept OMO bill quoted 21.60/21.00 and the 19 Aug OMO at 21.35/21.10. At the PMA this week, the DMO offered and allotted 161.88 billion across the standard maturities while total subscription stood at N563.17 billion. Stop rates on the 91-day, 182-day and 364-day declined by 37bps, 50bps and 35bps to 16.63%, 17.00% and 18.59%, respectively. Sequel to the auction, the newly issued 364-day bill garnered minimal demand as bids hovered at the 18.50% handle. The 4 Sept bill was also largely offered at the 18.30% handle, but bids remained scarce and as such, very few trades consummated. Week-on-week, the average benchmark yield appreciated by 53bps to close at 18.49%.
We expect similar sentiments.
FGN Bond Market
The FGN Bonds Market traded on a lackluster note with trades consummated on the FEB 34s bond at 19.70%. Earlier this week, the 19.89% MAY 2033 bond was bid at 19.90% and offered at 19.75%. However, sentiments changed during the week as bids on the 19.89% May 33s bond were quite elevated at 20.35% while offers stood at 20.20%. In addition, the old 2029 bond was quoted 19.70/19.25 and the 37s at 18.60/17.60. Ultimately, it was a quiet close to the week as the bond auction slated for next week was postponed to 23rd September with the 33s quoted 20.15/19.90 and the 31s bid at 20.15% while offers were nowhere to be seen. Week-on-week, the average benchmark yield appreciated by 5bps to close at 18.49%.
We expect mild buying sentiments.
FGN Eurobond Market
The FGN Eurobond Market kicked off the week on a bearish note ahead of inflation data as investors continue to debate over the potential size of the rate cut at the next FED meeting. The United States CPI data which printed at 2.5% vs 2.6% forecast and 2.9% previous did little to change market sentiments. The FGN Eurobond Market made quite a comeback during the week with oil off its lows as well. This was also fueled by the United States Producer Price Index (PPI) data which remained unchanged at 2.4% against 2.5% forecast. Also, the initial Jobless Claims printed at 230K as expected against 228K prior. Also, the Michigan Consumer Sentiments Index printed at 69 vs. 68 expected and 67.9. Week-on-week, the average benchmark yield appreciated by 3bps to close at 9.74%.
We expect a sustained bullish movement ahead of the Fed meeting.
Currency Market
The value of the Naira to the dollar appreciated by 294bps compared to the previous week, printing at ₦1546.41/$ to close the week at the Nigerian Autonomous Foreign Exchange Market Window (NAFEM).
Equities Market
The local bourse ended the week with the benchmark NGX All-Share Index (ASI) appreciating by 44bps to close at 97,456.6. Market capitalization also rose, closing at ₦56.00 trillion. Market breadth was positive at 1.34x, with 62 stocks advancing and 46 declining. This performance was driven by gains in FLOURMILL (+9.99%), CAVERTON (+9.96%), and ETI (+9.95%), and losses in DAAR (-9.72%), DEAPCAP (-8.82%), and PZ (-8.48%).
Trading activity was mixed, with the volume of shares traded increasing by 5.7% to 412.901 million units, while the value of shares traded depreciated by 18.89% to ₦6.467 billion. The most actively traded stocks by volume were JAPAULGOLD with 105.65 million units, FBNH with 43.19 million units, and ZENITHBA with 28.62 million units. In terms of value, FBNH led with ₦1.24 billion, followed by ZENITHBA at ₦1.07 billion, and GTCO at ₦521.3 Million.
Reflecting the day’s mixed performance, the NGX All-Share Index reflected a 1-week gain of 1.06% and a 4-week gain of 0.91%, with an overall year-to-date gain of 30.33%. Other notable indices are the NGX Top 30 Index (+0.46%; +0.82% 1WK; +29.40% YTD), NGX Banking Index (+2.72%; +5.12% 1WK; 0.53% YTD), and NGX Oil & Gas Index (-0.25%; +2.0% 1WK; +84.77% YTD).
