Bond Market closes flat as CBN Mops up N130bn via OMO T-bill Sales


Thursday, November 16, 2017 6:00PM / @Zedcrest Capital


The Bond Market

The bond market closed on a relatively flat note today, as slight sell at the open of the market were offset by some buys later in the day. Market activity remained focused on the long end of the curve (2027 s- 2037s), with slight buys however on the 2019 bond. Average bond yields consequently closed flat at 14.89%. We expect a slight uptick of about 3bps in yields tomorrow.

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 Treasury Bills

The T-bills market traded on a relatively flat note today, as market players continued to play on the short end of the curve, whilst they reinvested most of their OMO maturity inflows at the OMO auction by the CBN. The CBN sold a total of c.N130bn OMO T-bills in today’s session, consequently mopping up inflows 0f c.N133bn from maturing OMO bills. We expect the market to be slightly bearish tomorrow, as banks will try to create liquidity for their retail SMIS provisioning.

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The Money Market

The OBB and OVN rates fell to 6.17% and 6.67% today, as system liquidity remained positive despite the OMO T-bills sales by the CBN. System liquidity is estimated to close today at c.N166bn long from a positive opening figure of N155bn as published by the CBN. We expect rates to trend northwards tomorrow, due to the expected retail SMIS by the CBN.

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The FX Market

The CBN Official spot rate appreciated slightly by 0.02% to N305.95/$ from its previous day rate of N306.00/$. Its external reserves is also recorded to have improved by 2.04% to $34.31billion as at 14th of November 2017. Rates at the Investors and exporters FX window appreciated to N359.56/$ from N360.42/$ in the previous session. The parallel market however remained stable at its previous day rate of N362.50/$.

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