Fixed Income, Equity and Money Market Update

Fixed Income

In the fixed income market, investors are vaguely more active in the general bond space. Trading patterns has been cautious irrespective of the increase in one-year national treasury bills (NTB) stop rate. Hence, the NTB and Open Market Operations (OMO) yield curve closed at a flat rate of 4.43% and 5.50% respectively.

Concurrently, in the bond space, we saw a strong buy interest in the 2023s and 2037s. From a general outlook, bond yield curve flattened by 2bps to 11.28% on the 17 January 2021.Next week, the Debt Management Office (DMO) has on offer N150bn split equally across two maturities (2026 and 2042).

Equity Market

Nigeria’s equity market sustained its bearish run for a second straight session, with the ASI moderating by another 34bps. Despite today’s loss, the benchmark index was still able to eke out 137bps wow gain following the share buyback induced gains in DANGCEM earlier in the week. Consequently, the YTD return declined slightly to 4.42% while market capitalisation also dipped to N24.032tn.

The combination of FIDSON (+9.65% to N7.50), JBERGER (+3.64% to N22.80), and STERLNBANK (+3.29% to N1.57) were the outperformers today. On the flip side, SUNUASSUR (-8.82% to N0.31), CUTIX (-7.17% to N2.46), and MBENEFIT (-3.57% to N0.27) were the worst performers.

On the sectoral breakdown, 2 of 5 of our sectoral indices closed in the green terrain. For clarity, the NGX Banking and NGX Consumer Goods, and indices closed positive, rising by 26bps and 18bps, respectively. These neutered the losses across the NGX Insurance and NGX Industrial Goods indices both of which declined by 69bps and 94bps, respectively. The NGX Oil & Gas index closed flat.

Money Market

As at 17^th January 2021, funding rates in the money market for Overnight (O/N) rates Open Buy Back (OBB) and rose by 50bps each to 14.75% and 14.00% respectively. The rise in funding rates occurred with the positive liquidity close today at a surplus of N39.81bn relative to yesterday’s deficit of N76.41bn.