Nigeria_Fixed Income Daily: T-bill yields turn bullish despite CBN mop up
- Market commentary
§ The CBN conducted another OMO auction today, offering N50 billion apiece on the 188DTM and 349DTM bills. Whilst no sale was made on the 188DTM bill, the apex bank sold N8.6 billion on the 349DTM at a stop rate of 18.5% (effective yield: 22.48%). The Interbank Call rate however remained unchanged at 10.0%. At the FX interbank market, the naira spot and one year forward rate were also unchanged at N305.00 and N349.00 respectively.
§ Trading turned bullish on the T-bills market with yields moderating 23bps on average amidst healthy demand across the space. Notably, yields on the 13DTM (-248bps), 160DTM (-35bps) and 244DTM (-51bps) bills declined to 7.24%, 18.91% and 20.06 respectively. However, the bond market remained slightly bearish with yields on benchmark bonds relatively unchanged on average. Whilst the yields on the 16.00% 29 JUN 2019 and the 12.50% 22, JAN 2026 bonds rose 3bps each to settle at 15.51% and 16.08% respectively, the yield on the 12.40% 18 MAR 2036 bond declined 3bps to 16.04%.
§ Despite the bullish sentiment on the T-bills market, we expect cautious trading at week open as we foresee further liquidity mop up by the apex bank given the results of the last two OMO auctions. We also expect the bond market to remain tepid as the slightly bearish sentiment persists.
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