Author: Julius Alagbe

Nigerian Eurobond Yield Rises Amidst Evolving Market Conditions The Nigerian Eurobond market concluded on a bearish note, with the average yield increasing marginally by three basis points (3 bps) to 7.77%, reflecting weakened investor confidence amid evolving market conditions. Nigeria’s disinflation that shifted the real interest rate to 7.38% had fuelled increased demand for Nigeria’s US dollar-denominated bonds in the international market. The country’s borrowing cost is anticipated to decline in reaction to economic reforms and rising investor confidence. Markets anticipate some portfolio adjustments by offshore investors as the U.S. slashed rates on Wednesday. African Eurobonds traded mixed to bearish…

Rates Mix as Inflows to States Boost Liquidity to N2.87trn The short-term benchmark interest rates closed on a mixed note after the Central Bank of Nigeria (CBN) statutory payments to states lifted the liquidity level in the financial system. The interbank market maintained strong liquidity following additional CBN inflows to states, keeping rates stable at 26.5%. Data releases by AIICO Capital Limited highlighted that the market saw an inflows of N410 billion, which lifted liquidity to N2.866 trillion from N2.456 trillion the previous day, Banks continue to place funds at the CBN Standing Deposit Facility in the absence of significant…

Nigerian Bonds Yield Rises on Portfolio Reshuffles The Nigerian government bonds sell pressure extended due to some portfolio rebalancing efforts by wealth managers in the secondary market. The market is projected to respond to lower spot rates offered to investors at the primary market auction for Treasury bills by the Central Bank. The authority cuts spot rates on Treasury bills across standard tenor, and one year bills was priced down below 17%. Investors see the downward rates repricing as signal the monetary policy committee could begin policy easing as real interest rate surged to 7.38% following August disinflation. The market…

CBN Cuts Rates on Nigerian Treasury Bills, Rejects N1.25trn The Central Bank of Nigeria (CBN) cuts spot interest rates on Nigerian Treasury bills across standard tenors at the primary market auction on Wednesday. The Apex Bank opened N290 billion worth of treasury bills for investors’ subscription across 91-day, 182-day, and 364-day maturities. Investors responded to the auction strongly, with about N1.6 trillion in total bids staked across the standard tenors at the midweek auction. The market response was influenced by excess liquidity in the financial system, and disinflation played a strong role in spot rates repricing. The CBN results revealed…

Nigerian Exchange Market Cap Rises by N310bn to N89.87trn The Nigerian Exchange (NGX) market capitalisation rose by about N310 billion to N89.87 trillion on Wednesday due to bargain hunting in some mid, and large cap stocks. Trading activities in the local bourse closed on positive territory, with key performance indicators advancing by 35 basis points. The local bourse rebounded came after the previous day’s loss, buoyed by cherry-picking activities in some medium and large-cap stocks, such as ARADEL, INTBREW, and DANGCEM among others. Investor sentiment was largely shaped by ongoing reactions to recently released macroeconomic reports, which influenced trading decisions…

Naira Falls as USD Demand Surges, Foreign Reserves Hits $41.9bn The Nigerian local currency, the naira, pulled back against the US dollar (USD) at the official window on Wednesday due to a foreign currency liquidity shortfall at the official window. The exchange rate depreciated as the Nigeria Foreign Exchange Market (NFEM) witnessed an imbalance between the US dollar volumes supplied and aggregate demand from eligible market participants. Spot FX rate at the official FX market settled at N1494 per dollar, from N1484 the previous day. Updated FX data from the Central Bank of Nigeria (CBN) showed that the naira touched…

Equities Investors Gain N310bn as NGX Index Climbs by 0.35% Equities investors gained N310 billion on Wednesday as trading activities on the Nigerian Exchange (NGX) platform rebound from previous selloffs. Due to bargain hunting on some bellwether companies, the Nigerian stock market grew by 0.35 per cent on Thursday, translating to a gain of N310 billion for investors. The positive performance was driven by increased bargain hunting and investors interest in stocks like: Chellaram, Austin Laz, The Initiate, Sovereign Trust Insurance, Aradel Holdings and 23 others. Specifically, market capitalisation, which opened at N89.555 trillion, added N310 billion to close at…

Nigeria Customs Reacts to Suspension of FOB Levy on Imports The Nigeria Customs Service (NCS) says it has begun consultation with the Ministry of Finance following a directive to suspend the implementation of the four per cent Fee On board (FOB) levy on imports. The service spokesman, Abdullahi Maiwada, made this known in a statement on Tuesday in Abuja. The service said that the move aims to seek guidance from its supervisory ministry on alternative measures to adopt during the suspension to ensure continuity of service delivery to all stakeholders. Maiwada reaffirmed the NCS’s commitment to supporting government fiscal policies…

Oil Prices Decline as G7, EU Move to Phase Out Russian Fuel Oil prices declined in the global commodity market on Wednesday as markets weighed the US Federal Reserve’s upcoming rate decision and risks to supply from the Russia-Ukraine war. Brent crude traded at $68.05 a barrel, down 0.2% from the previous close of $68.18. US benchmark West Texas Intermediate (WTI) slipped 0.01% to $64.08. The Fed is expected to cut rates by 25 basis points later Wednesday, with markets eyeing updated economic projections and Chair Jerome Powell’s comments for signals on the policy path. Analysts warned that while lower…

Investors Take Profit on Bonds as Real Interest Rate Hits 7.38% Investors with interest in Federal Government of Nigeria (FGN) bonds trimmed their portfolio holdings in the secondary market on Tuesday following a sharp decline in the headline inflation rate for August. Though real return on investment improved along with disinflation and the high interest rate environment, investors are jittery with analysts altering positions on the monetary policy rate outlook. The consumer price index data released showed inflation fell from 21.88% to 20.12%, widening the real interest rate to 7.38%, making the fixed coupon payments on the local bonds more…