Nigeria_Fixed Income Daily: Fixed Income trades mixed amidst liquidity mop up
- Market commentary
§ At yesterday’s bond auction, the DMO sold N34.95 billion, N74.90 billion and N105.10 billion respectively on the 5-year, 10-year and 20-year bond at respective yields of 16.8990%, 16.9945% and 16.9920%. Amidst the liquidity mop up, Interbank Call rate advanced 250bps to 10.00%. Meanwhile, at the FX interbank market, the naira spot rate depreciated N0.25 whilst the one year forward rate appreciated N29.00 to close at N305.50 and N349.00 respectively.
§At yesterday’s PMA, the CBN auctioned a total of N269 billion across the 91DTM, 182DTM and 364DTM bills at respective stop rates of 13.8999%, 17.2500% and 18.6499% (effective yields: 14.40%, 18.87%, 22.91%). Despite the mop-up, the T-bills market turned bullish as yields declined 13bps on average buoyed by healthy demand across board. Particularly, yields on the 133DTM (-116bps), 196DTM (-56bps) and the 329DTM (-82bps) bills moderated to 16.95%, 19.21% and 20.94% respectively. The Bonds market however traded bearish as yields adjusted to auction levels. Notably, yields on the auction bonds - 14.50 FGN JUL 2021, 12.50% FGN JAN 2026 and 12.40% FGN MAR 2036 rose 30bps, 24bps and 23bps respectively to settle 16.79%, 16.89% and 16.87%.
§ Given the liquidity mop up, we expect mixed trading to persist at week close albeit with a bearish tilt.
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