Global Market Updates:
U.S. Government Shutdown Continues
The U.S. government shutdown persisted through the week, resulting in continued delays in the release of key economic reports such as the Producer Price Index (PPI) and weekly unemployment claims.
As uncertainty in the U.S. government shutdown continues, gold extended its rally for the eighth consecutive week, surpassing the $4,000-per-ounce mark for the first time ever as investors sought safe-haven assets.
U.S. Equities Close Lower
The S&P 500 had been on course for a modest weekly gain until midday Friday, when escalating tensions between the United States and China sent the index down 2.7%.
Similarly, NASDAQ, and Dow Jones finished the week down 2.5% and 2.7% lower respectively.
Nigerian Domestic Market Updates
The Nigerian Stock Market
The Nigerian Stock Market ended the week on a positive note, with the NGX All-Share Index (NGX-ASI) closing 2.37% higher week-on-week to 146,988.10 points after a five-day rally.
Bargain hunting in Dangote Cement (DANGCEM), MTN Nigeria (MTNN), SEPLAT Energy (SEPLAT) and Lafarge Africa (WAPCO) offset declines in the banking sector.
Sectoral performance was mostly positive, with gains in Consumer goods (+0.8%), Industrial Goods (+4.2%), Insurance (3.7%), and Oil & Gas (2.9%). The Banking sector (-0.4%) was the lone negative sector for the week.
Fixed Income and Foreign Exchange (FX)
Treasury Bills
The Nigerian Treasury Bill (NTB) market traded bullishly, driven by strong liquidity despite multiple auctions by the Central Bank of Nigeria (CBN) Open Market (OMO) auctions. Consequently, interbank rates moderated slightly, with Open Buy Back Rate (OPR) and Overnight Rate (OVN) closed at 24.50% and 24.97% respectively.
At the primary auction, the Debt Management Office (DMO) offered ₦570 billion across the three tenors. Stop rates for the 182- and 364-days papers decline by 0.05% and 1.01% respectively, while the 90-day paper remained unchanged.
Overall, the average benchmark NTB yield declined by 34bps week-on-week to 15.93%.
Eurobonds
In the Eurobond Market, the Nigerian papers traded mixed to bearish during the week, influenced by shifting global risk sentiment and uncertainty surrounding the U.S. government shutdown, which dampened investors’ appetite.
Sentiment turned briefly positive on Thursday following dovish comments in the U.S. Fed minutes, spurring renewed demand. However, falling oil prices and renewed risk aversion triggered another round of profit taking on Friday.
Overall, the market closed weaker, with the average benchmark yield up by 27bps week-on-week at 7.97%.
Federal Government of Nigeria (FGN) Bonds
The FGN Bonds traded mixed to bullish with activities starting off slowly at the beginning of the week before witnessing mild profit-taking in mid-tenor papers by midweek.
Long-dated bonds (2049–2053 maturities) attracted strong demand, resulting in modest yield compression.
The week ended with the average benchmark yield dropping by 35bps week-on-week to 15.82%.
Foreign Exchange
This week, the naira appreciated marginally week-on-week, closing the week at ₦ 1,455.17 to $1.
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