Monday, May 23 2016 12: 12 PM/ DLM Research
Download Full Report Here
During the week under review, activities in the domestic fixed income market were influenced by: 1) Treasury bills auction and redemption by the CBN; and 2) The release of April inflation figure (13.70%) by the National Bureau of Statistics (NBS).
At the treasury bills auction, N32.44billion, N22.82billion and N55.68billion of 91day, 182day and 364day benchmarks were offered and sold at marginal rates of 8.10%, 9.20% and 12.48% respectively. Subscription level stood at N216.52billion (195% of volume offered). In our opinion, the high subscriptions at the auctions are indicative of elevated system liquidity from treasury bills redemption worth N110.94billion.
The fixed income market witnessed mixed reactions from the beginning to mid last week as selling pressure on short and mid-tenored maturities forced their yields upwards whilst demand for long tenors led to decline in their yields. The dwindling system liquidity, rise in inflation rate (from 12.80% to 13.70%) and anticipated hike in interest rate at this week’s CBN MPC meeting equally contributed to the selling spree towards the end of last week’s trading sessions. Consequently, week on week, yields rose by an average of 53basis points across the curve.
In the week ahead, we expect redemption of OMO bills worth c.N83.82billion. The market may experience quiet trading sessions this week as dealers take positions and await the outcome of the CBN’s MPC meeting slated for 23rd and 24th May, 2016.
1. The Nigeria Bond Watch - Review and Outlook @050316
2. The Nigeria Bond Watch - Review and Outlook @051616
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 [email@example.com] Dunn Loren Merrifield Limited.