Nigeria_Fixed Income Daily: Bears extend run
Market commentary
§The CBN held an OMO auction today, offering N50 billion on both the 259DTM and 357DTM bills. The apex bank eventually sold N38 billion on the 259DTM and N101 billion on the 357DTM at respective stop rates of 18% (effective yield: 20.64%) and 18.5% (effective yield: 22.59%). Despite this, interbank Call rate declined to 17% (prev: 33%) as liquidity from OMO maturity (N294 billion) eased the market. At the FX interbank market, the naira appreciated N6.35 to close at N308.00.
§Bearish trading continued in fixed income markets today with yields in the T-bills market rising 12bps on average amidst cherry-picking across the space. Notable changes were registered on the 56DTM (+144bps) and 112DTM (+123bps) bills as they closed at 16.72% and 15.43% respectively. In the bond market, bearish sentiment was less pronounced with yields on the on-the-run bonds up 2bps on average. Across the space, the largest yield advances were on the 15.54% FGN FEB 2020 and 12.40% FGN MAR 2036 bonds as they advanced 4bps and 7bps to close at 14.97% and 15.27% respectively.
§ With market sentiment remaining weak, we expect the bearish trading pattern to persist at week close.
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