November 28, 2023/Coronation Research
Summary
- Opening market liquidity was reported at N527.1bn on Friday (24, November ‘23). Call, overnight, and repo rates closed within a range of 9% – 25% as rates in the money market tightened. Our expectation in the current week is that money market rates moderate slightly as the projected inflow from FGN bond coupon payments and FACC payments are likely to outweigh possible CRR debits.
- Last week, the average NTB yield declined by -230bps to close at 10.5% w/w. At the primary market NTB auction held last week Wednesday, the CBN offered N211.7bn but allotted N561.7bn worth of NTBs to market participants. The stop rates changed for two tenors; 91- day: 8% (previously 7%), 182-day: 12% (previously 11%), 364-day: 16.75%
- The average yield for OMO bills remained unchanged to close at 14.7% w/w.
- In the Eurobond market, the average yield declined by -20bps to close at 10.8% w/w.
- Meanwhile, in the secondary market for FGN bonds, the average yield increased by +20bps to close at 15.9% w/w.
- According to S&P Global, UK Manufacturing PMI grew to 46.7 in November ’23 compared with 44.8 in the previous month. Service PMI slightly increased to 49.5 in November ‘23 from 49.3 in the previous month. Overall, the composite PMI rose to 50.1 in November ’23 from 48.7 in October ’23.
- According to S&P Global, Eurozone manufacturing PMI increased marginally to 43.8 in November ‘23 from 43.2 in October ’23. This was the highest reading since May ’23. Nevertheless, the reading still suggests a significant deterioration in the health of the manufacturing sector, partly attributable to weakened consumer demand due to inflationary pressures. The Eurozone services PMI increased to 48.2 in November ‘23 from 47.8 in October ’23. Overall, the composite PMI also increased to 47.1 in November ‘23 from 46.5 in October ’23. Looking ahead, business confidence remained unchanged, with firms maintaining a moderate level of optimism regarding the outlook for activity in 2024.
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