Nigeria_Fixed Income Daily: Mixed trading persists
Market commentary
§. Interbank Call rate rose further in today’s session, up 300bps to close at 19.58%. At the FX interbank market, the naira appreciated N5.31 to close at N311.06.
§ At today’s Primary Market Auction (PMA), the CBN sold N45.17 billion, N80 billion, and N120 billion on the 91DTM, 182DTM, and 364DTM bills at 15.44%, 18.0589%, and 18.50% (effective yield: 16.06%, 19.85%, and 22.69%) respectively. The T-bills market traded mixed with yields up 3bps on average. Whilst the most notable yield increases were seen on the 36DTM (+35bps) and 211DTM (+50bps) bills as they closed at 15.36% and 21.13% respectively, yields declined on the 120DTM (-58bps) and 183bps (-56bps) bills to close at 19.07% and 20.05% respectively. Similarly, the bond market traded mixed with yields unchanged on average. Whilst yields on the 9.85% FGN JUL 2017 and 9.35% FGN AUG 2017 bonds rose 15bps and 18bps to close at 21.41% and 21.22% respectively, yields on the 15.10% FGN APR 2017 and 15.54% FGN FEB 2020 bonds declined 21bps and 16bps to close at 20.57% and 15.12% respectively.
§ With yields at the PMA auction closing slightly below secondary market levels, we expect more upbeat trading as secondary market yields converge to auction levels.
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