The Nigeria Bond Watch - Review and Outlook @011116


Monday, January 11 2016 10: 45 AM/ DLM Research

Download Full Report Here


As trading sessions resumed for the year, activities during the review period were influenced by the Treasury bills auction by the Debt Management Office (DMO) and OMO bills auctions and redemption by the CBN – which influenced liquidity levels and affected market behavior.

At the treasury bills auction, a total of N136.25billion T.bills was offered – N25.40billion (91day), N25.00billion (182day) and N85.85billion (364day) whilst N55.40billion, N25.00billion and N55.85billion were sold at marginal rates of 4.00%, 6.99% and 8.05% against 9.00%, 6.19% and 7.45% for 91day, 182day and 364day respectively at the previous auction. Total subscription stood at N311.51billion, 229% of amount offered.

At the OMO auctions, a total of N90.00billion OMO bills with tenors ranging between 205day and 224day was offered whilst N190.07billion were sold at marginal rates ranging between 7.75% and 7.90%. Total subscription stood at N257.17billion, 286% of amount offered. In our opinion, the high subscription was due to elevated system liquidity stemming from treasury bills redemption worth c.N136.25billion.

The fixed income OTC market started the year on a bearish note as selling activities outweighed the buy side, further supported by the CBN’s OMO auctions. As a result, yields rose by an average of 51basis points across all trading benchmarks.

In the week ahead, we expect redemption of OMO bills worth N250.17billion. Given the gradual reduction in system liquidity and barring further OMO auctions from the CBN, the market is expected to remain in the bearish terrain.

Related News Last Month:
The Nigeria Bond Watch - Review and Outlook @120715
The Nigeria Bond Watch - Review and Outlook @121415

Disclaimer/Advice to Readers:
While the website is checked for accuracy, we are not liable for any incorrect information included. The details of this publication should not be construed as an investment advice by the author/analyst or the publishers/Proshare. Proshare Limited, its employees and analysts accept no liability for any loss arising from the use of this information. All opinions on this page/site constitute the authors best estimate judgement as of this date and are subject to change without notice. Investors should see the content of this page as one of the factors to consider in making their investment decision. We recommend that you make enquiries based on your own circumstances and, if necessary, take professional advice before entering into transactions. This article is published with the consent of Dunn Loren Merrifield, the author(s) for circulation to the online investment community in accordance with the terms of usage. Further enquiries should be directed to the author whose e-mail is [] Dunn Loren Merrifield Limited.

Related News