We witnessed renewed interest in FGN bonds during yesterday’s trading session with demand largely driven by offshore clients . The 2022s, 2024s and 2036s bonds witnessed the most patronage with yields compressing by 5bps across the yield curve. We expect the demand to continue today, however at a slow pace as we approach this month’s FGN bond auction.
The T-bills market traded on a bearish note with intense selloff witnessed especially on the short end of the curve . This was as a result of tight market liquidity coming from FX intervention and OMO T-bills sales by the CBN. Yields increased by 56bps across the yield curve. We expect the bearish trend to continue today as the illiquidity in the Money Market persist.
The OBB and O/N rates rose higher to close at 78.33% and 81.67% yesterday as the CBN sold N16.7bn of OMO T-bills, further tightening liquidity in the Market. Market Liquidity is estimated at N70billion negative as at close of business yesterday. We expect interest rate to remain elevated closing the week as we do not expect any significant inflows to bolster systemic liquidity
The local unit opened at NGN310.00/$1 and remained unchanged over the course of the trading session. Rates eventually closed at NGN305.55/$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.
| FGN BOND CLOSING LEVELS | ||
| Description | Bid Yield (%) | Offer Yield (%) |
| 16.00 29-JUN-2019 | 16.47 | 16.37 |
| 15.54 13-FEB-2020 | 16.39 | 16.29 |
| 14.50 15-JUL-2021 | 16.34 | 16.24 |
| 16.39 27-JAN-2022 | 16.08 | 15.98 |
| 14.20 14-MAR-2024 | 15.92 | 15.82 |
| 12.50 22-JAN-2026 | 16.08 | 15.98 |
| 16.2884 24 MAR 2027 | 16.27 | 16.17 |
| 12.1493 18-JUL-2034 | 15.98 | 15.88 |
| 12.40 18-MAR-2036 | 15.95 | 15.85 |
| TBILLS CLOSING LEVELS | ||
| Maturity | Bid Discount (%) | Offer Discount (%) |
| 31-Aug-17 | 18.10 | 17.85 |
| 30-Nov-17 | 18.60 | 18.35 |
| 3-May-18 | 18.40 | 18.15 |
