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Nigeria_Fixed Income Daily: Yields trade mixed in T-bills market

• Market commentary

• The CBN announced an OMO auction offering N40 billion on the 224DTM bill and eventually sold N49.2 billion – pegged at a stop rate of 9.5% (effective yield:10.09%). Consequently, the Interbank Call rate rose marginally by 4bps to 3.87%. At the FX interbank market, the Naira depreciated 30kobo to close at NGN199.05/USD.

• In reaction to the OMO auction, bears dominated the T-bills market at the start of today’s session though modest demand on selected maturities resurfaced towards the end of the trading session. Notwithstanding, yields inched up 10bps on average across maturities with the 21DTM (-36bps), 147DTM (+40bps) and 294DTM (+46bps) recording the most notable changes in yields to close at 3.97%, 9.36% and 10.81% respectively. The bond market however traded mixed with yields advancing a modest 2bps on average across the traded maturities. Notably, yield on the 15.10% FGN APR 2017 bond declined 6bps to 11.32% whilst yield on the 12.1493% FGN JUL 2034 bond rose 8bps to 13.22%

• In the absence of any OMO auction at week close, we expect trading sentiment to be upbeat particularly on the short end of the space. However, we anticipate another mixed trading session for the bond market as traders continue to cheery-pick.