Nigeria’s financial landscape has seen significant developments with the Central Bank of Nigeria (CBN) introducing revised guidelines to enhance transparency and governance in the foreign exchange market. These guidelines emphasize ethical practices, real-time reporting, and regulated interbank trading while mandating compliance from banks, dealers, and BDC operators. Separately, the naira has appreciated steadily, supported by increased dollar inflows and the launch of the Electronic Foreign Exchange Matching System (EFEMS), which has boosted market confidence by facilitating transparent and efficient FX transactions. Meanwhile, the Federal Government’s recent $2.2 billion Eurobond issuance aims to finance the 2024 fiscal deficit, fund critical infrastructure projects, and diversify funding sources to strengthen the nation’s economy. These combined efforts reflect a broader push to stabilize Nigeria’s currency and economic framework.
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Market liquidity opened the day at ₦632.39 billion long. The Open Buy Back (OBB) rate and the Overnight (OVN) rate closed at 27.67% and 28.17%, respectively.
We expect rates to hover around current levels.
Treasury Bills Market
The FGN Treasury Bills Market began on a calm note ahead of the PMA tomorrow where the DMO offered N583.26bn across the standard maturities. At the auction, the DMO floated N583.26bn across the standard tenors. At the auction, the DMO allotted N756.70bn out of a total subscription of N2.55 trillion. Stop rates on the 91-day and 182-day bill remained constant at 18.00% and 18.50% while the rate on the 364-day declined by 57bps to 22.93%. We saw the newly issued 364-day bill trade as low as 21.90%, representing a 103bps decline from stop rate. Today, we saw the CBN issue N772.93 billion worth of OMO bills on the long end at 23.98%, a 30bps decline from previous stop rate out of a total subscription of N2.24 trillion. Sequel to the auction, we saw the newly issued 2 Dec OMO bill quoted 22.00/21.80. Week-on-week, the average benchmark yield appreciated by 22bps to 25.57%
We expect a calm session as investors implore a cautious approach ahead of the PMA on Wednesday.
FGN Bond Market
Activities in the FGN Bonds Market remained muted throughout the week. Nonetheless, we saw the 19.00% Feb 2034 Bond bid at 20.80% and offered at 20.60% while the 19.89% 2033 maturity was quoted 20.85/20.70. Furthermore, we saw the 2031 bond bid at 21.90% and offered at 21.80%. Week-on-week, the average benchmark yield appreciated by 1bp to 19.03%
We expect activities to remain weak.
FGN Eurobond Market
The FGN Eurobonds Market commenced on a bearish note following the commencement of the 6.5yr and 10yr issuances which closed at 9.625% and 10.375% respectively, with a total of $2.2bn sold against a total subscription of $8.8bn. The newly issued Eurobonds were the highlight of the week with trades happening at 102 on the new 31s and 103.70 on the 2034 maturity. It was a data filled week from the United States. Amongst that data included the ISM Manufacturing PMI which rose to 48.4 against 47.5 forecast and 46.5 previous, the Jolts Job Openings printing at 7.74m vs 7.51 forecast and 7.44m previous. In addition, the ADP Non-farm employment change printed at 146k vs 152k forecasted and 233k previous while the ISM Services PMI came in at 52.1 vs 55.7 predicted and 56.0 previous. Finally, the NFP data today printed at 227K vs 220K forecast and 12K previous while unemployment rate rose to 4.2% from 4.1%. Week-on-week, the average benchmark yield declined by 44bps to 9.03%
We expect mild profit-taking activities.
Currency Market
The value of the Naira to the dollar closed at ₦1535.00/$ at the Nigerian Foreign Exchange Market Window (NAFEM).
Equities Market
The local bourse ended the day with the benchmark NGX All-Share Index (ASI) appreciating by 10bps to close at 98,210.75. Market capitalization also increased, closing at ₦59.55 trillion. Market breadth was positive at 1.35x, with 27 stocks advancing and 20 declining. This performance was driven by gains in GOLDBREW (+9.98%), JAPAULGOLD (+9.30%) and SUNUASSUR (+9.07%), and losses in ETERNA (-4.62%), STERLING (-4.12%), and CONHALL (-3.85%).
Trading activity was robust on the day, with the volume of shares traded increasing by 43.75% to 1.04 billion units, while the total value of shares traded increased by 35.66% to ₦17.41 billion. The most actively traded stocks by volume were WEMABANK with 472.50 million units, FIDELITY with 251.53 million units, and FCMB with 45.00 million units. In terms of value, WEMABANK led with ₦4.11 billion, followed by FIDELITY at ₦4.04 billion, and MTNN ₦2.87 billion.
Reflecting the day’s performance, the NGX All-Share Index reflected a 1-week gain of 0.44% and a 4-week gain of 1.12%, with an overall year-to-date gain of 31.34%. Other notable indices are the NGX Top 30 Index (+0.10%; +0.89% 1WK; +33.01% YTD), NGX Banking Index (+0.73%; +1.98% 1WK; 15.76% YTD), and NGX Oil & Gas Index (0.17%; +2.16% 1WK; +139.35% YTD)
