Nigeria_Fixed Income Daily: T-bills yields decline further
Market commentary
§ Amidst OMO maturity in the tune of N163 billion, Interbank Call rate moderated further to 7.8%. At the FX Interbank market, the naira appreciated N3.53 to close at N306.71 whilst the one year forward rate remained unchanged at N388.20.
§Results of yesterday’s T-bills PMA showed that a sum of N129.7 billion was sold across the 91-DTM, 182-DTM and 364-DTM bills at effective yields of 14.40%, 18.68% and 22.31% respectively. Following the result release and amidst the improved liquidity, trading in the T-bill secondary market turned relatively bullish as yields adjusted to auction levels. The most significant declines were noticed on the 7DTM (-247bps), 14DTM (-149bps) and 21DTM (-154bps). Trading in the bond market was relatively quiet with marginal yield movement across traded instruments. Yields on all traded benchmark bonds rose about 1bp on the average save for the 16.00% FGN JUN 2019 and 15.54% FGN FEB 2020 bonds which recorded 1bp and 2bps declines in respective yields to 14.51% and 14.92%.
§ Whilst we anticipate investor appetite to wax stronger by week close on the back of decent system liquidity, we highlight the possibility of an OMO auction announcement by the CBN which could trigger some market volatility.
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