Nigeria_Fixed Income Daily: Bearish sentiment persists at week open
​§Continuing its liquidity tightening stance, the CBN offered N50 billion on the 199DTM bill, eventually selling N126.9 billion at a stop rate of 18% (effective yield: 19.96%). Despite this, Interbank Call rate declined 784bps to 10.33% on the back of FAAC inflow today. At the FX interbank market, the naira depreciated N3.88 to close at N318.83.
§Fixed income markets opened the week on a bearish note as market participants took a cue from the OMO mop up. The T-bills market traded significantly bearish amidst sell pressure on mid-long dated bills. The most significant moderations were on the 199DTM (+110bps), 276DTM (+126bps) and 339DTM (+63bps) bills with yields settling at 19.91%, 21.19%, and 22.01% respectively. Similarly, the bond market traded somewhat bearish with yields on the on-the-run bonds (the most liquid in the secondary market) up 4bps on average. The most notable changes were seen on the 16.00% FGN JUN 2019 and 14.20% FGN MAR 2024 bonds as their yields inched up 7bps and 13bps to close at 15.08% and 15.12%.
§Given the persistent bearish sentiment (from the preceding week), we expect cautious trading to persist tomorrow amidst weak investor demand.
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