Fixed Income Market Update – 5th June 2017

A Flurry of Sellers in The Fixed Income Spaces as Local Investors Wrap Up for Year-End…

The bond market closed on a quiet note with minimal trades consummated during the  trading session. Total volume traded last week was below N10 billion reflecting the weak appetite for FGN bonds . We expect another quiet trading session today as we do not foresee any renewed demand for FGN bonds.

The Treasury Bills market traded with mixed sentiment on Friday with a bit of sell off on the short end of the curve and demand on the medium end . The long end remained flat due to OMO flotation by the CBN . Yields increased marginally by 5bps across the entire yield curve.   We expect the market to slightly  bullish which client demand dictating market sentiments. Demand will be skewed towards the short end of the curve as we expect more supply of medium and long tenured T-bills via OMO auctions today.

The OBB and O/N rates declined further to close at 8.33% and 9.08% despite the sale of N81.8Billion of OMO T-bills last week Friday . Market liquidity is estimated at N20billion positive as at close of business last week.  Interest rates are expected to inch up slightly opening today as the CBN continues their liquidity tightening activities to tame the demand for FX and curb inflationary pressures.

The local unit opened at  NGN310.00/$1  and remained unchanged over the course of the trading session. Rates eventually closed at NGN305.50/$1 as the CBN injected some FX  liquidity in the market.  We expect the CBN to continue to intervene in the interbank market to calm the demand for FX.

DescriptionBid Yield (%)Offer Yield (%)
16.00 29-JUN-201916.4416.34
15.54 13-FEB-202016.3616.26
14.50 15-JUL-202116.4416.34
16.39 27-JAN-202216.2216.12
14.20 14-MAR-202416.0315.93
12.50 22-JAN-202616.1616.06
16.2884 24 MAR 202716.3216.22
12.1493 18-JUL-203416.0515.95
12.40 18-MAR-203616.0415.94
MaturityBid Discount (%)Offer Discount (%)