The Central Bank of Nigeria (CBN) is set to suck in some liquidity from the system as it last week resumed the Open Market Operation (OMO).
The immediate result was system liquidity slumping 51.8 percent week-on-week (W/w) to N33.8 billion.
Analysts at Afrinvest attest that the reduction was a result of the auctions conducted by the central bank at the OMO window and Treasury Bills (T-Bills) front.
“Nonetheless, OPR and Overnight (OVN) rates closed the week lower at 2.0 percent and 2.8 percent respectively from 5.8 percent and 6.8 percent”, said analysts at Afrinvest.
At the bond market, the bearish sentiment in the domestic bonds market extended last week, as average yield across tenors rose 21 basis points (bps) w/w to 13.3 per cent. The most selloffs were seen on short-term bonds as the average yield increased 51bps w/w. Similarly, the average yield on the mid-and long-term bonds advanced 21bps and 13bps w/w, respectively.
The domestic equities market sustained weekly gains, with the All Share Index (ASI) going up 0.2 per cent w/w to close at 65,325.37 points.
Consequently, market capitalisation increased N92.7 billion to N35.6 trillion, while Year-To-Date (YTD) return grew to 27.5 per cent (previously 27.2 per cent). Activity level faltered as average volume and value traded declined by 32.4 per cent and 15.3 per cent w/w to 348.2 million units and N5.0billion respectively.
Brent crude oil saw an uptick of 0.8 per cent w/w, to reach $86.88/bbl. This momentum was despite renewed economic concerns in China and a large inventory buildup in the US.
Meanwhile, Nigeria’s foreign reserves plunged 0.2 per cent w/w, reaching $33.9 billion as of August 10th, 2023…
On the global scene, last week was marked by the absence of substantial positive catalysts, the MSCI World Index experienced a 0.8 per cent w/w decline. In the US, the S&P 500 and NASDAQ indices fell 0.4 per cent and 2.0 per cent w/w respectively.
Analysts at Afrinvest said the drop was influenced by pressure on bank shares, triggered by Moody’s decision to downgrade the credit ratings of 10 small- to mid-sized banks.
