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Nigeria_Fixed Income: Bond market trades bearish following auction
Market commentary
- The CBN announced an OMO auction today offering
N30 billion on the 231DTM bill. However, no sale was made at the auction. Interbank placement rates rose further today, with the Call rate up 171bps to 6.92%. At the FX interbank market, the Naira remained unchanged at NGN199.05/USD, retracing from an intraday high of NGN198.50/USD.
- Following the announcement of the OMO auction, trading in the T-bills market turned mixed as demand resurfaced on the short end whilst selloff persisted across most mid-long dated maturities. Notably, whilst yield on the 91DTM bill declined 30bps to 8.04%, yield on the 133DTM bill advanced 24bps to 8.88%. Similarly, mixed sentiment trailed the bond market (albeit with a bearish bias) as participants reacted to yesterday’s auction rates. Overall, yields advanced 12bps on average as sizeable selloff across most maturities outweighed modest demand on a few maturities. Particularly, whilst yield on the 12.50% FGN JAN 2026 bond declined 35bps to 13.64%, yield on the 16.00% FGN JUN 2019 bond advanced 74bps to 13.80%.
- We foresee a tepid trading session at week close as the April inflation figure (scheduled to be released early next week) comes into focus.
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