Nigeria_Fixed Income Daily: Bond market trades mixed on PMA day
- Market commentary
§ The Debt Management Office (DMO) conducted its monthly bond auction today, 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. Ahead of OMO maturities due tomorrow, Interbank Call rate declined 310bps to 7.50%. At the FX interbank market, the naira spot and one year forward rate remained stable at N305.25 and N378.00 respectively.
§The T-bills market recorded another bearish session as yields advanced 26bps on average. Recording the biggest upward move were the 64DTM (+107bps), 36DTM (+95bps) and the 78DTM (+78bps) bills as their yields rose to 12.90%, 17.03% and 14.95% respectively. However, the bonds market traded mixed with no clear cut pattern as average yield on benchmark bonds was relatively unchanged. Whilst, yields on the 10.70% FGN MAY 2018 and 16.39% FGN JAN 2022 bonds declined 15bps and 4bps respectively to close at 19.45% and 16.10%, that of the 15.54% FGN FEB 2020 and 12.40% FGN MAR 2036 bonds rose 6bps apiece to settle at 16.47% and 16.64%.
§ With maturities in tune of c.N290 billion set to hit the market tomorrow, we see likelihood of an OMO auction by the CBN which could trigger some volatility in the T-Bills market. For the bond space, market direction would be directed largely by result of today’s auction which is yet to be released.
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