Money Market

Liquidity in the system showed some improvement but was still negative. Consequently, interbank rates remained high, with the Overnight Policy Rate (OPR) and the Overnight Rate (O/N) settling at 32.33% and 32.75%, respectively.

Outlook: We anticipate that rates will stay high in the short term, pending FAAC credits.

Treasury Bills

The Treasury bill market had a quiet session with few transactions consummated due to the liquidity shortage. Thus, the average mid-rate for the benchmark NTB papers ended at 23.34%.

Outlook: We expect the market to trade mixed sentiments tomorrow.

FGN Bonds

The local bonds market experienced a calm session following yesterday’s FGN bond auction. The DMO allotted c.₦211.15 billion across two maturities, with marginal rates of 21.15% (APR 2029) and 22.00% (FEB 2031), respectively. There was minimal trading on the February 2034 bond and sideways interest in the April 2029 bond. Overall, the average mid-yield increased by 9 bps, closing at 19.51%.

Outlook: We anticipate that activity will remain varied tomorrow.

Eurobonds

The Eurobonds market ended negatively, reflecting low interest in SSA and North African securities. Investors adopted a general risk-off attitude as economic data presented a mixed picture of the U.S. economy. Retail sales for November surpassed predictions, climbing 0.7% compared to the anticipated 0.5%, indicating strength in consumer spending. Conversely, industrial production fell unexpectedly by 0.1%, falling short of forecasts for a 0.3% increase. Overall, the average mid-yield for Nigerian bonds rose by 10 bps to close at 9.38%.

Outlook: Participants are expected to exercise caution, even as investors turn their attention to tomorrow’s FOMC meeting, where a 25-bps rate cut is anticipated along with a pause in January, with only two more rate cuts projected for 2025.

Nigerian Equities

The Nigerian stock market ended the trading session positively, with the NGX-ASI increasing by 13 bps to reach 100,050.94 points and the market capitalization rising to ₦60.64 trillion. This growth was driven by the share price increases of MRS, ARADEL, STANBIC, and GTCO, which compensated for the selloff in OANDO. Year-to-date, the ASI has grown by 33.80%. Most sectors performed well, particularly the Insurance Index, which rose by 1.56%, while the Consumer and Industrial Goods indices saw slight declines.

Outlook: We expect some mixed activity tomorrow.

Foreign Exchange

The Nigerian Foreign Exchange Market (NFEM) experienced heightened activity today, with improved liquidity. Transactions were conducted within $/₦1,510.00 to $/₦1,560.00.

Outlook: We anticipate that the Naira will continue to trade within a similar range.

Commodities

Oil prices decreased as China’s economic figures raised concerns about demand, while investors stayed cautious ahead of the U.S. Federal Reserve’s decision on interest rates. Brent crude was approximately priced at $73.12 per barrel, whereas WTI was around $70.27. Similarly, Gold faced downward pressure from a strengthening U.S. dollar and rising Treasury yields as investors concentrated on the Federal Reserve’s last policy meeting of the year, with increasing expectations for a gradual pace of rate cuts in 2025. Gold was trading close to $2,636.89 per ounce.

Outlook: We expect geopolitical and macroeconomic factors to continue to affect market sentiment.