Nigeria_Fixed Income Daily: Yields closed mixed at week close

• Despite the marginal rise in system liquidity to N341 billion (Previous: N325 billion), interbank placement rates advanced across all tenors (up 248bps on average) – with the Call rate up 600bps to 13.6% (following the tightening stance of the MPC). At the FX interbank market, the Naira depreciated 7 kobo to NGN199.05/USD after recording an intraday high of NGN198.00/USD.

• At yesterday’s T-bills PMA, the CBN sold N115billion across the 91DTM, 182DTM and 364DTM bills at effective yields of 6.09%, 8.66%, and 10.57% respectively (coming in largely in line with yesterday’s secondary market level). However, the T-bills market sustained its bearish pattern as yields rose 11bps on average. The most notable increases were recorded on the 56DTM (+145bps), 140DTM (+109bps), and 147DTM(+77bps) bills closing at 6.76%, 8.62%, and 8.21% respectively. The bond market however closed the week upbeat (with demand weighted across most maturities) as yields declined 19bps on average. Particularly, yields on the 15.10% FGN APR 2017 and 16.00% FGN JUN 2019 bonds declined 44bps and 20bps to 10.04% and 10.57% respectively.
• In anticipation of the second quarter bond issuance calendar, we expect the bond market to trade cautiously. However, we foresee a mixed trading session for the T-bills market at week open as cherry picking persists amidst bearish sentiment.