Author: Marketforces Africa

Nigerian Bond Yield Rises as Auction Triggers Reactions The average yield on Federal Government of Nigeria (FGN) bonds increased as Debt Management Office (DMO) auction results triggered portfolio rebalancing. Local bond yields have been fluctuating below 17%, reflecting the current market perception, investors’ positioning, and tight supply by the authority. On Tuesday, the yield surged on the back of intense sell-offs in Nigerian local bonds maturing in FEB-2028, MAR-2027, MAR-2028, NOV-2028, APR-2029, and NOV-2029 papers.As a result of the post-auction risk-off sentiment, the average yield expanded by 19 basis points (bps) to 16.89%, according to investment banking firms. Across the…

Eurobond Market Sees Rising Appetite for Nigeria’s Papers The average yield on Nigeria’s US dollar bond declined due to increased demand from foreign portfolio investors in the international market. Hopes of economic rejuvenation and a fast-declining headline inflation rate have raised appetite for the nation’s sovereign eurobond paper in contrast to the bearish pose recorded by some African issuers. Nigeria’s borrowing costs in the international market have been projected for a decline in the absence of significant economic and political shocks, supported by the latest ratings upgrade from Moody’s, Fitch, and S&P Ratings. In a note, Cowry Asset Management Limited…

Naira Declines Against U.S Dollar as FX Demand Spikes The Nigerian local currency, the naira, diverged across the foreign currency markets amidst rising demand for the US dollar by eligible corporate FX users seeking foreign payments.  FX data released by investment banking firms revealed that the local currency gained N3 per dollar at the parallel window to close at N1,547 on Tuesday, while also declining by 6 bps at the Nigeria Foreign Exchange Market (NFEM) window to print at N1,537.75/$ from N1536.42 per dollar. The interbank NFEM saw increased FX demand against limited supply, AIICO Capital Limited said, noting that…

Nigerian Exchange Index Climbs as Investors Gain N203bn The Nigerian Exchange All Share Index maintained an uptrend, with bullish sentiments dominating transactions in the local bourse for the second trading session in the new week. Trading data revealed that the market index climbed by 0.23%, closing at 141761.36 points, while market capitalization surged by ₦203.48 billion to ₦89.69 trillion, increasing the year-to-date (YTD) return to 37.73%. Stockbrokers said positive movement in the equity market was largely driven by buying interest in GTCO, INTBREW, and ZENITHBANK, though trading activity weakened. The NGX update revealed that trading volume in the local bourse…

Crude Oil Prices Decline as U.S. Threatens Russia Crude oil prices slipped in the global commodity market on Tuesday after US President Donald Trump warned of “very heavy” sanctions on Russia should it fail to reach a deal with Ukraine, raising fears of broader economic fallout and weaker energy demand. Brent crude was trading at $67.73 per barrel, down 0.7% from the previous close of $68.20. The US benchmark West Texas Intermediate (WTI) fell 0.7% to $64.13 from $64.61 in the prior session. Trump’s threats to sanction Russian oil flows are keeping pressure on crude prices. Trump added that Moscow…

CBN Offers Higher Rates on OMO Bills to Keep Hot Money Coming Foreign portfolio investors and local deposit money banks increased bets on Nigerian OMO bills as the Apex Bank continues to offer juicy rates across tenors. Due to the elevated yield on OMO bills, hot money inflows from offshore investors continue to find their way into Nigeria, supporting the naira’s stability in the short-term horizon. While there have been rate repricings on local treasury papers, the Central Bank of Nigeria (CBN) maintained elevated rates on OMO bills to keep foreign portfolio investors’ hot money coming, boosting US dollar liquidity…

Manufacturers Kick Against Reintroduced 4% FOB Charge The Manufacturers Association of Nigeria (MAN) on Monday kicked against the reintroduction of the four per cent Free on Board (FOB) charge by the Nigeria Customs Service, which took effect on Aug. 4. Mr Segun Ajayi-Kadri, the Director-General of MAN, said in Lagos that the move contradicts the government’s widely publicised suspension of the charge. He noted that manufacturers were concerned it would significantly increase the cost of importing raw materials, machinery, and spare parts that are not available locally. Ajayi-Kadri explained that the sudden reintroduction of the four per cent FOB charge…

Shor-Term Rates Plunge as FAAC Inflows Hits Financial System The short-term benchmark interest rate plunged sharply as a huge inflow shared among tiers of government from the Federal Account Allocation Committee (FAAC) hit the financial system on Monday. The sufficient liquidity position dragged funding costs lower, while local deposit money bank activities at the Central Bank of Nigeria standing lending facility reduced sharply. Hence, interbank rates (NIBOR) opened the week with a downward trajectory across all maturities, with the overnight rate declining by 2.04% and the 1-month, 3-month, and 6-month rates decreasing by 1.75%, 1.88%, and 1.79%, respectively. In its…

Nigerian Exchange Surges by N284bn, Boosts by NIDF Listing The Nigerian Exchange (NGX) opened strong on Monday, with a stream of bargain hunting that lifted key performance indicators on the north side following a negative outing last week. Investors’ portfolio value increased by N284.44 billion on the day, supported by Chapel Hill Denham’s Nigeria Infrastructure Debt Fund shares listing on the Exchange. The Nigerian Exchange All-Share Index (ASI) advanced by 0.30% to close at 141,433.41 points, elevating the year-to-date return to 37.41%. The market recorded marginal divergence between the index and the market capitalization, primarily driven by the additional shares…

UK Remains Western Islamic Finance Hub Despite Limited Local Uptake –Fitch The UK will continue as the leading Western hub for Islamic finance, supported by the London Stock Exchange (LSE) serving as a key listing venue for global US dollar sukuk, and the use of English law in governing most international sukuk, Fitch Ratings says. The London Metal Exchange is accessed by many Islamic banks to facilitate cash financing, accrdoing to Fitch, noting that UK’s financial, professional and legal services, and human capital support the global Islamic finance industry. Fitch highlighted that UK banks are key arrangers and counterparties in…