Nigeria_Fixed Income Daily: Bearish sentiment persists in T-bills market
- Market commentary
§ Amidst relatively unchanged liquidity, interbank call rate declined marginally to 10.60% (prev: 10.67%). Meanwhile, at the FX interbank market, the naira spot and one year forward rate remained stable at N305.25 and N378.00 respectively.
§Yields in T-bills space extended the upward trend, rising 19bps on average. Notably, the 16DTM (+60DTM), 37DTM (+67bps) and the 65DTM (+104bps) bills recorded the most significant advances with their respective yields closing at 13.62%, 16.75% and 12;.87%. Bearish trading resurfaced in the bonds market as yields advanced 3bps on average across the benchmark notes. Particularly, yields on the 15.54 FGN FEB 2020, 16.39% FGN JAN 2022 and 12.40% FGN MAR 2036 bonds rose 4bps, 6bps and 7bps respectively to close at 16.41%. 16.14% and 16.58%.
§ Given the liquidity constraint (following recent mop ups), we expect the bearish trading to persist in the T-bills market. Meanwhile, the Debt Management Office (DMO) will conduct its monthly bond auction tomorrow, offering N40 billion apiece on the 14.50% FGN JUL 2021 and 12.40% FGN MAR 2036 bonds and N50 billion on the 12.50% FGN JAN 2026 bond. Hence, we anticipate a slightly tepid trading session for the bonds.
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