Nigeria_Fixed Income Daily: Demand dominates T-bills space ahead of PMA
Market commentary
Despite relatively unchanged system liquidity, the interbank Call rate advanced 108bps to 6.08%. Though the naira remained unchanged at the spot market at N305.25, the one year forward rate recorded a marginal N3 depreciation to N349.00.
Ahead of tomorrow’s Primary Market Auction (PMA), trading in the T-bills market unexpectedly turned bullish as stronger buying momentum across the short – mid dated bills drove yields 25bps higher on average. Specifically, yields on the 51DTM and 163DTM bills declined sharply by 496bps and 116bps to 8.87% and 17.49% respectively. On the other hand, sentiment in the bond market remained largely quiet with a bearish tilt as yields on benchmark bonds came in 3bps higher on average. The 15.54 FGN FEB 2020 and 14.20% FGN MAR 2024 bonds recorded the most yield advances, up 13bps and 5bps to 16.43% and 16.09% respectively.
At the T-bills PMA tomorrow, the CBN will be offering N242.40 billion across the 91DTM (N45.2 billion), 182DTM (N80.0 billion), and 364DTM (N117.2 billion) bills. In line with recent trend, we expect rates to close largely in line with current secondary market levels. That said, we foresee a much calmer trading session in the T-bills market in tomorrow’s session as investors await the outcome of the auction.
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