Report

Nigeria_Fixed Income Daily: Bonds trade bullish following lower volume on offer


  • Market commentary

§ With system liquidity little changed, Interbank call rate moderated a slight 83bps to close at 10.67%. Meanwhile, the naira held at N305.25 and N349.00 in the spot market and one year forward rate respectively.

§Previous bearish sentiment in the T-bills market abated slightly in today’s session as modest demand resurfaced on select maturities. Whilst yields on the 37DTM (+109bps) and 44DTM (+74bps) bills rose to 14.23% and 9.24%, yields on the 107DTM (-29bps), 198DTM (-34bps), and 345DTM (-28bps) bills moderated to 15.44%, 19.51%, and 21.79% respectively. Meanwhile, trading in the bond market was more obviously bullish following a relatively less aggressive offer circular from the Debt Management Office (DMO) for the upcoming February Bond auction. Notably, yield on the 12.50% FGN JAN 2026 bond declined 7bps to 16.66% following confirmation that February offer will drop to N20 billion (January sale: N75 billion). Yields on the 15.54% FGN FEB 2020 and 16.39% FGN JAN 2022 bonds also fell 7bps and 4bps to 16.40% and 16.14% respectively.

§ The DMO will be offering N20 billion on the 10-year bond and N45 billion apiece on the 5-year and 20-year bonds at the February Bond Auction next Wednesday. The total offer of N110 billion is just about half of the eventual N215 billion sale recorded at the January auction. Consequently, we anticipate slightly bullish trading in the bond market tomorrow given the expected reduction in bond supply. 

Provider
Vetiva Capital Management
Vetiva Capital Management

​Vetiva provides clients with independent and unbiased access to analysis and opinion. We keep our clients on the cutting edge of market information and provide up to date market intelligence on quoted companies. Our services allow brokers, investment firms, and asset managers focus their energies on developing investment strategies and client relationships.

Other Reports from Vetiva Capital Management

ResearchPool Subscriptions

Get the most out of your insights

Get in touch