Nigeria’s inflation rate surged to 33.88% in October 2024, up from 32.7% in September, driven by rising transportation costs and food prices, according to the National Bureau of Statistics (NBS). This marks a 6.55 percentage point increase from October 2023, reflecting worsening economic conditions. Food inflation climbed to 39.16% year-on-year, propelled by higher prices for staples like rice, yam, vegetable oils, and beverages such as Milo and Bournvita. Month-on-month, food inflation rose by 0.3% to 2.94%. Core inflation, excluding volatile items, stood at 28.37% year-on-year, with notable increases in costs for transportation, rent, and personal grooming services. While states like Sokoto and Edo recorded the highest food inflation, others like Kwara and Kogi saw slower rises. The data highlights the pressing need for stronger policy measures to address escalating costs and economic instability.
Money Market
Market liquidity opened the day at ₦253.23 billion long. The Open Buy Back (OBB) rate and the Overnight (OVN) rate closed at 26.09% and 26.88%, respectively.
We expect rates to hover around current levels.
Treasury Bills Market
The FGN Treasury Bills Market kicked off the week on a quiet note. Nonetheless, we saw the 22 May NTB quoted 22.30/22.10 and trades executed on the 6 Feb NTB at 23.70%. In addition, there was a rumored OMO auction, which never held. The November bills garnered mild attention with quotes seen on the 4 Nov OMO bill at 23.60/23.30 and the 6 Nov NTB offered at 22.35% while offers were scarce. Week on week, the average benchmark yield appreciated by 11bps to close at 24.35%.
We expect a quiet session as focus shifts to the bond auction.
FGN Bond Market
The FGN Bonds Market traded on a subdued note throughout the week. The little activity seen was skewed to the 19.89% 2031 bond which traded at 21.25% and the 2034s quoted 20.40/20.10. Furthermore, we saw bids on the 33s at 20.45% while offers were at 20.25%. The bond offer circular was released with 60bn offered on the 29s and 31s each. Week-on-week, the average benchmark yield remained at 18.94%
We expect a calm session as investors wait on the outcome of the scheduled bond auction.
FGN Eurobond Market
The FGN Eurobonds Market traded on a bullish note at the start of the week, albeit modest following the U.S holiday. However, there was a reversal of this trend due to profit-taking activities in addition to lower Brent crude prices. This was exacerbated by the U.S CPI at 2.6%, in line with expectations but higher than previous level of 2.4%, the PPI data which came in at 2.4%, surpassing the forecast of 2.3% and Fed Chair Powell’s comment about not being in a hurry to cut rates. Week-on-week, the average benchmark yield appreciated by 33bps to close at 9.46%
We expect a modest recovery as investors find current levels attractive.
Currency Market
The value of the Naira to the dollar appreciated by 159bps compared to the previous week, printing at ₦1652.25/$ to close the week at the Nigerian Autonomous Foreign Exchange Market Window (NAFEM).
Equities Market
The local bourse ended the day with the benchmark NGX All-Share Index (ASI) appreciating by 51bps to close at 97,788.78. Market capitalization also decreased, closing at ₦59.42 trillion. Market breadth was positive at 1.63x, with 31 stocks advancing and 19 declining. This performance was driven by gains in EUNISELL (+10.00%), FLOURMILL (+10.00%) and JOHNHOLT (+9.97%), and losses in DEAPCAP (-9.17%), IKEJAHOTEL (-8.54%), and DAARCOMM (-6.45%).
Trading activity was mixed on the day, with the volume of shares traded increasing by 1.13% to 293.75 million units, while the total value of shares traded decreased by 13.47% to ₦6.73 billion. The most actively traded stocks by volume were ACCESS with 33.34 million units, ZENITH with 30.32 million units, and CONHALL with 20.10 million units. In terms of value, ZENITH led with ₦1.30 billion, followed by ACCESS at ₦826.52 million, and OANDO ₦785.94 million.
Reflecting the day’s performance, the NGX All-Share Index reflected a 1-week gain of 0.5% and a 4-week loss of 0.35%, with an overall year-to-date gain of 30.7%. Other notable indices are the NGX Top 30 Index (+0.47%; +0.31% 1WK; +31.88% YTD), NGX Banking Index (+0.72%; +1.96% 1WK; 17.62% YTD), and NGX Oil & Gas Index (1.32%; +1.07% 1WK; +132.38% YTD).
