August 28, 2024/Coronation Research
Summary
- Opening market liquidity was reported at N1.1m on Friday (23, Aug ‘24). Call, overnight, and repo rates closed within the range of 8.6% – 26.2%, as rates in the money market moderated.
- Last week, the average NTB yield decreased by 262bps to close at 22.3% w/w. At the latest primary market NTB auction held last week, the CBN offered N409.9bn, but allotted N291bn worth of NTBs to market participants. The stop rates stood at: 91-day: 18.2%, 182-day: 19.2%, and 364-day: 20.9%.
- The average yield for OMO bills declined by -72bps to close at 25.1% w/w.
- In the secondary market for FGN bonds, the average yield decreased by -8bps to close at 19.6% w/w. The DMO held its latest monthly auction of FGN Bonds (19, August ’24). It offered N190bn but raised N374.8bn through re-openings of the 19.30% FGN APR 2029, 18.50% FGN FEB 2031 and 19.89% FGN MAY 2033. The bids were allotted at marginal rates of 20.3% (previously: 19.89%), 20.9% (previously: 21%), and 21.5% (previously: 21.98%) respectively.
- In the Eurobond market, the average yield decreased by -20bps to close at 10.1% w/w.
- According to China’s Bureau of Statistics, China’s inflation rose to 0.5% y/y in July ’24 compared with 0.2% y/y recorded in June ‘24. This reading marks the highest since February ’24 and can be partly attributed to adverse weather condition in some parts of the country. Inflationary pressure persists across clothing (+1.5% y/y vs +1.5% y/y), housing (+0.1% y/y vs +0.2% y/y), health (+1.4% y/y vs +1.5% y/y), and education (+1.7% y/y vs +1.7% y/y). Meanwhile, transport prices declined further (-0.6% y/y vs -0.3% y/y).
- China’s Manufacturing PMI declined to 49.8 in July ’24 from 51.8 in June ’24, reflecting the first contraction in factory activities since October ’24. The services PMI increased to 52.1 in July ’24 from 51.2 in June ’24. Overall, the composite PMI declined to 51.2 in July ’24 from 52.8 in June ’24.
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