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Bond yields close positive on renewed local interest


Friday, February 23, 2018/ 09.50 PM/Zedcrest Capital

** Council of State Backs $1bn Intervention Fund for Agriculture***

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The bond market traded on a bullish note, with buy sentiments strengthened by some demand from local clients. Yields consequently declined by c.8bps on average. We expect the market to remain slightly bullish in the coming week, as market players anticipate improved liquidity inflows and favorable client demand.

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Treasury Bills

The T-bill Market traded on a relatively flat note, with yields compressing marginally by c.5bps on average. This was following a continued OMO issuance by the CBN on the same bills offered in the previous session. Demand remained focused on the 181-day bill, with a total sale of c.N52bn at 14.40%. We expect yields to trend lower in the coming week, with inflows from expected FAAC payments and retail FX refunds expected to bolster system liquidity.


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Money Market

The OBB and OVN rates inched slightly higher to close the week at 11.50% and 12.42%. This was following outflows for bond auction settlement (c.N79bn) and OMO T-bills sales (c.N52bn). System Liquidity is however estimated to remain robustly positive at c.N100bn positive, having opened the day at c.N230bn. We expect rates to be relatively stable opening next week, but with slight pressures on Monday, due to expected outflows for OMO T-bill and wholesale FX sales.



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FX Market

The CBN Official spot rate fell sharply by 0.18% to N305.95/$ from N306.50/$ in the previous session.

The spot rate in the Investors and Exporters’ FX Window depreciated by 0.01% to close at N360.70/$ from N360.66/$ in the previous session.

Rates in the Unofficial market also depreciated by 0.03% to N360.80/$, from its previous rate of N360.70/$.

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Related News

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3.       Summary of FGN Bond Auction Results for February 2018

4.       DMO Sells N52bn of New-10 Year Bond at 13.98% Marginal Rate

5.       T-bill Yields Decline as CBN Maintains Hold on OMO

6.       Return to the Eurobond Market in Good Time

7.       Inter-Bank FX Rate hits Ytd High of N306.00 Per $ Amid CBN’s wholesale interventions

8.       Sustained Rallies on Bonds following Successful Eurobond Outing

9.       Ahead of Next Bond Auction Scheduled 21st February, 2018

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