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Nigeria_Fixed Income: Buying momentum weakens in the bond market
Market commentary
- On the back of OMO maturity totaling about
N83.8 billion, the CBN announced an OMO auction, offeringN40 billion on a 217DTM bill. However no sale was eventually made at the auction. At the FX interbank market, the Naira remained unchanged at NGN199.01/USD.
- Sentiment remained bullish in the T-bills market as we had expected, albeit at a weaker tempo as yields declined 21bps on average. The 161DTM (-63bps), 315DTM (-65bps), and 343DTM (-67bps) bills recorded the most notable declines, closing at 9.26%, 11.42%, and 11.62% respectively. On the other hand, trading in the bond market turned mixed as participants adopted a cautious trading pattern following previous rallies. Whilst the yield on the 15.10% FGN APR 2017 bond declined 59bps to 11.07%, the yield on the 16.39% FGN JAN 2022 bond advanced 42bps to 13.65%.
- Pending further clarity on currency front, we expect trading in the fixed income market to remain mixed with demand relatively weighted on the short end of the curve.
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