THE average yield on the Nigerian Treasury Bills instrument steadied in the secondary market on Tuesday as Naira appreciates to N422.67 against the United States dollar at Investors and Exporters foreign exchange (FX) window.
Today, Nigeria’s fixed income market opens quiet while trading activities across various fixed interest instruments were relatively calmer. In the equity market, investors see a large gain on the first trading session in the year over heavy bargain hunting in industries stock.
At the money market, short term interest rates continue to drop over robust liquidity position in the financial system. The money market receives a N70 billion inflow from OMO maturities, thus supporting system liquidity.
Consequently, the interbank rate slide following a significant reduction in open buy back and overnight lending rates, according to the FMDQ Exchange platform.
The overnight lending rate decreased by 300 basis points to close at 7.50 per cent as against the last close of 10.50 per cent. Likewise, the Open Repo (OPR) rate declined by 333 basis points to close at 6.67 per cent compared to 10.00 per cent on the previous close.
As system liquidity has improved with OMO repayment of ₦70.00 billion, FSDH Capital said in its note the money market rates are likely to remain subdued, barring any mop-up activity by the Central Bank.
Today, Naira appreciated at Investors and Exporters FX window by 2.84 per cent as the dollar was quoted at ₦422.67 as against the last close of ₦435.00 – following about 5% devaluation rate by the apex bank.
Most participants maintained bids between ₦400.00 and ₦445.60 per dollar, analysts added. In the secondary market, the Nigerian T-Bills closed on a flat note with the average yield across the curve remaining unchanged at 4.50 per cent.
Average yields across short-term, medium-term, and long-term maturities remained unchanged at 3.57 per cent, 4.12 per cent, and 5.29 per cent, respectively.
In the open market operation (OMO Bills) segment, Cordros Capital note indicates that the average yield across the curve expanded 4 basis points at 5.50 per cent.
FSDH Capital however hinted that average yields across short-term and long-term maturities remained unchanged at 5.49 per cent and 5.52 per cent, respectively.
FGN bonds secondary market was bearish as the average bond yield across the curve cleared higher by 3 basis points to close at 11.89 per cent from 11.86 per cent on the previous day.
Cordros Capital said in its market noted that the average yield across the long tenor of the curve increased by 6 basis points as investors sold off the APR-2049 (+40bps) bond.
However, the average yields across short tenor and medium tenor of the curve decreased by 2 basis points and 1 basis point, respectively.
The 27-APR-2023 maturity bond was the best performer with a decrease in the yield of 4 basis points, FSDH Capital said in its note while it sees the 26-APR-2049 maturity bond as the worst performer with an increase in yield of 40 basis points.
FSDH Capital maintains that the secondary bond market is likely to remain subdued in the short term.
Comments are closed.