The Central Bank of Nigeria (CBN) raised its Monetary Policy Rate (MPR) by 25 basis points to 27.5% in November 2024, marking the sixth consecutive hike this year, as inflation reached 33.9% in October, near a three-decade high. Governor Olayemi Cardoso emphasized the need to curb inflation driven by rising fuel and food prices and a weakening naira, while retaining other key monetary policy measures, including the Cash Reserve Ratio and liquidity ratio. Speaking at an annual banking dinner, Cardoso signaled potential rate easing in the future if inflation pressures abate, noting that current measures are temporary, and their effects typically manifest over six to nine months. Despite the naira’s significant depreciation since the currency peg was loosened in 2023, improved flexibility in exchange rates and increased capital inflows offer signs of stabilization. Analysts predict rate hikes could continue into mid-2025 as persistent inflation challenges linger.
Money Market
Market liquidity opened the day at ₦237.56 billion short. The Open Buy Back (OBB) rate and the Overnight (OVN) rate closed at 29.25% and 29.91%, respectively.
We expect rates to hover around current levels.
Treasury Bills Market
The FGN Treasury Bills Market traded on an active note following additional FAAC disbursement. We witnessed improved bids on the 20 Nov bill at 22.20% while the 30th Sept OMO bill was bid at 23.60% and offered at 22.90%. Week on week, the average benchmark yield appreciated by 76bps to close at 25.36%.
We expect the PMA to take center stage next week.
FGN Bond Market
The FGN Bonds Market traded on a subdued note as investors continued to maintain a cautious approach. There were few trades consummated due to the wide bid/ask spread. Week-on-week, the average benchmark yield appreciated by 5bps to 19.02%
We expect the quiet trend to persist.
FGN Eurobond Market
The FGN Eurobonds Market concluded the week on a bearish note as prices declined across the curve. Week-on-week, the average benchmark yield declined by 3bps to close at 9.47%
We expect a similar session.
Currency Market
The value of the Naira to the dollar declined by 121bps compared to the previous week, printing at ₦1672.29/$ 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) declining by 28bps to close at 97,506.87. Market capitalization also decreased, closing at ₦59.12 trillion. Market breadth was negative at 0.81x, with 21 stocks advancing and 26 declining. This performance was driven by gains in HMCALL (+9.54%), ROYALEX (+8.77%) and SOVRENINS (+7.35%), and losses in REGALINS (-9.80%), LASACO (-9.75%), and ACADEMY (-9.71%).
Trading activity was mixed on the day, with the volume of shares traded decreasing by 18.68% to 514.39 million units, while the total value of shares traded increased by 39.47% to ₦15.08 billion. The most actively traded stocks by volume were FBNH with 126.02 million units, HMCALL with 91.28 million units, and JAPAULGOLD with 61.38 million units. In terms of value, SEPLAT led with ₦7.74 billion, followed by FBNH at ₦3.28 billion, and BUACEMENT ₦532.48 million.
Reflecting the day’s performance, the NGX All-Share Index reflected a 1-week loss of 0.50% and a 4-week gain of 0.08%, with an overall year-to-date gain of 30.4%. Other notable indices are the NGX Top 30 Index (-0.3%; -0.4% 1WK; +31.44% YTD), NGX Banking Index (+0.67%; -0.28% 1WK; +14.05% YTD), and NGX Oil & Gas Index (-2.56%; -1.61% 1WK; +128.30% YTD).
