Nigeria_Fixed Income Daily: Improved liquidity supports modest demand
§Amidst an improved system liquidity (c.N60.8bn) following today’s T-bill maturity, Interbank Call rate moderated significantly to close at 9.25% (Previous: 20.08%). At the FX interbank market, the naira appreciated N2.25 to close at N314.75.
§Fixed income markets traded bullish amidst buoyant investor demand following improved liquidity. In the T-bills market, yields declined 53bps on average amidst strong buying interest on the mid-dated maturities with yields on the 175DTM (-126bps), 217DTM (-123bps), and 273DTM (-128bps) bills closing at 18.34%, 17.26%, and 17.42% respectively. Similarly, the bond market traded upbeat with yields down 16bps on average. Particularly, demand was weighted around the short to mid-dated bonds with yields on the 15.54% FGN FEB 2020 and 14.20% FGN MAR 2024 bonds down 15bps and 8bps to close at 14.67% and 14.87%.
§Barring any liquidity mop up from the CBN, we expect the bullish sentiment to persist in tomorrow’s session amidst modest liquidity.
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