FX
Last week, the exchange rate at the Investors and Exporters Window (I&E Window) lost 0.01% to close at N461.38/US$1. Elsewhere, the foreign exchange (FX) reserves of the Central Bank of Nigeria (CBN) decreased by 0.56% to US$35.53bn, as the CBN continues to intervene across the various FX windows. This does not seem to be the time for a change in CBN policy. The CBN is likely to continue with its policy of gradual loosening of the I&E Window rate while managing FX reserves at close to their historic highs. Only small FX rate adjustments over the coming weeks and months is expected.
BONDS & T-BILLS market
Last week’s T-bill and Federal Government of Nigeria (FGN) bond markets were characterised by thin demand as the requirement imposed on banks to issue cash through ATMs drained money from current accounts and reduced bank liquidity. This negatively impacted market liquidity overall. Last week the secondary market in Federal Government of Nigeria (FGN) bonds was bearish as the average yield closed up 37bps to 13.56%. The yield on the 3-year bond held steady at 12.03%, at 7-years rose by 1bp to 14.14% and at 10-years rose by 48bps to 9.07%. The secondary market for T-bills was also bearish, for the same reason. The effects were dramatic with the average T-bill yield rising by 194bps to 7.73% and with the yield on the 342-day T- bill rising by 373bps to 12.39%. Demand at last week’s T-bill auction was weak. A total of N145.47 billion was offered with a subscription of N168.58 billion, the same amount being allotted. The bid-to-offer ratio was 1.2x versus 6.8x at the previous auction on 15 March. The stop rate on the 91-day bill rose by 345bps to 6.00%; on the 182-day bill by 200bps to 7.00%; on the 364-day bill by 535bps to 14.74%, implying an annual yield of 17.28%.
Short-term swings in market liquidity are having profound effects on yields, which are volatile from one week to the next. The next T-bill auction is scheduled for 13 April and the next FGN bond auction is scheduled for 15 April, so the market may settle down over the coming week. Over the course of the year we expect the overall direction of T-bill and FGN bonds to be upwards as increases in government borrowing are felt by the market.
Oil
Last week, the price of Brent gained for the second consecutive week, increasing by 6.37% to settle at US$79.77/bbl. Nevertheless, Brent is down 7.15% year-to-date and is trading at an average of US$82.16/bbl, 17.08% lower than the average of US$99.09/bbl in 2022. The increase in oil prices was supported by a combination of supply issues in Northern Iraq, a significant weekly drop in U.S. crude inventories, and positive PMI data from China which showed signs of economic recovery. Oil firms were forced to halt production of around 450,000 barrels per day (bpd) of crude exports due to an arbitration case between Iraq and Turkey involving a pipeline. Over the weekend, OPEC+ surprisingly agreed to cut oil production by a total of 1.16 million barrels per day. This has kept oil price elevated at the start of this week. We maintain that for the most part of the year, prices are likely to remain well above the US$75.00/bbl set in Nigeria’s government budget.
Equities
Last week, the NGX All-Share Index lost 1.20% to settle at 54,232.34 points. Consequently, its year-to-date return slipped to 5.82%. Dangote Sugar (-7.10%), Dangote Cement (-6.25%) and Airtel Africa(-4.50%) closed negative while Oando (+34.12%), Sterling Bank (+6.67%) and United Bank of Africa (+4.38%) closed positive. Performances across the NGX sub-indices were broadly positive as the NGX Banking
(+3.67%) sub-index led the gainers, followed by NGX Insurance (+1.61%), NGX Pension. Goods (+1.26%), NGX Consumer Goods (+0.79%) and NGX Industrial Goods (+0.36%) sub- indices while the NGX-30 (-0.01%) and NGX Oil/Gas (-2.02%) sub-indices closed negative. Coronation Research
NGX All-Share Index extends losses by 8bps
Nigerian equities extended losses in the opening session of the week as the All-Share Index closed 0.08% weaker to settle at 54,190.28. Selloffs of in Tier-1 banks, ZENITHBANK (-0.19%), GTCO (-0.39%) and FBNH (-0.45%) were the primary drivers of the decline. Inevitably, the ASI’s year-to-date (YTD) return fell to 5.73%, while the market capitalisation lost ₦22.91bn to close at ₦29.52trn.
Analysis of today’s market activities showed trade turnover settled lower relative to the previous session, with the value of transactions down by 35.32%. A total of 292.56m shares valued at ₦2.38bn were exchanged in 4,408 deals. FIDELITYBK (+0.19%) led the volume and value charts with 79.73m units traded in deals worth ₦426.80m.
Market breadth closed negative at a 1.07-to-1 ratio with declining issues outnumbering advancing ones. UACN (-9.95%) topped fifteen (15) others on the laggard’s log, while LASACO (+10.00%) led fourteen (14)
others on the laggard’s table.
Find below key highlights of market activities
| Indicators | Current | Change (%) | YTD |
| All-Share Index | 54,190.28 | -0.08 | 5.73 |
| Market Cap. (₦ ‘trillion) | 29.52 | -0.08 | 5.75 |
| Volume (millions) | 292.56 | -47.56 | |
| Value (₦ ‘billion) | 2.38 | -35.32 |
Dividend Information for 2023
| Company | Dividend (Bonus) | Closure Date | Payment Date |
| BUACEMENT | ₦2.80 (final) | 11-Aug-23 | 24-Aug-23 |
| STANBIC | ₦2.00 (final) | 12-Apr-23 | 26-May-23 |
| NESTLE | ₦36.50 (final) | 28-Apr-23 | 18-May-23 |
| SEPLAT | $0.075 (final) | 19-Apr-23 | 10-May-23 |
| ZENITHBANK | ₦3.20 (final) | 17-Apr-23 | 2-May-23 |
| WAPCO | ₦2.00 (final) | 11-Apr-23 | 28-Apr-23 |
| NB | ₦1.03 (final) | 17-Mar-23 | 26-Apr-23 |
| DANGCEM | ₦20.00 (final) | 31-Mar-23 | 24-Apr-23 |
| MTNN | ₦10.00 (final) | 28-Mar-23 | 20-Apr-23 |
| DANGSUGAR | ₦1.50 (final) | 27-Mar-23 | 15-Apr-23 |
