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Nigeria_Fixed Income Daily: Bullish sentiment persists following PMA

• Market commentary

§ At yesterday’s Primary Market Auction, the CBN sold N45 billion, N80 billion and N177 billion across the 91DTM, 182DTM, and 364DTM bills at respective stop rates of 13.7990%, 17.2491% and 18.5400% (effective yields: 14.29%, 18.87% and 22.75%). Meanwhile, Interbank call rate declined to 5.00% (prev: 5.42%). On the currency front, the naira remained unchanged at N305.25 at the spot market whilst the one year forward rate appreciated N29.00 to N349.00.

§With yields at the PMA settling lower than market expectations, the T-bills market traded bullish as yields declining 52bps on average. Notably, yields on the 91DTM, 175DTM and 336DTM bills moderated 58bps, 60bps, 54bps to close at 13.52%, 18.52% and 21.27% respectively. The Bond market continued slightly bullish with yields declining 4bps across the benchmark bonds. Particularly, yield on the 12.50% FGN JAN 2026 and 12.1493% FGN JUL 2034 bonds declined 2bps apiece to settle at 16.63% and 15.85% respectively.

§ With liquidity inflow from OMO and PMA maturities slightly higher than outflow from yesterday’s auction, we expect the excess liquidity (N27 billion) to further support already bullish sentiment at week close.