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Nigeria_Fixed Income: Fixed income market mixed at week close
Market commentary
- Despite a modest moderation in system liquidity, interbank placement rates declined marginally with the Call rate down 8bps 3.17%. At the FX interbank market, the Naira remained unchanged at NGN199.05/USD.
- Demand remained dominant in the T-bills market at week close as yields declined 31bps on average. The most sizeable yield decline was recorded on the short-mid dated maturities. Particularly yields on the 41DTM, 62DTM, and 76DTM bills declined 184bps, 105bps, and 97bps to close at 4.12%, 5.64%, and 5.72% respectively. On the other hand, tepid trading resurfaced in the bond market as market participants stayed cautious. Overall, yields advanced 8bps on average with yields on the 15.54 FGN FEB 2020 and 12.1493% FGN JUL 2034 bonds up 23bps and 21bps to 13.61% and 13.81% respectively.
- Whilst we expect the short end of the yield curve to remain broadly upbeat in the coming week (given the modest system liquidity), we believe sentiment in the bond market will remain tepid at week open as investors stay cautious ahead of the June bond offer circular.
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