Yields on Fixed Income Instruments Subdued as Naira Falls
The average yields on fixed income instruments remain subdued on Tuesday as Nigerian local currency, naira depreciates again at the official window as Nigeria’s import index jumps.
Meanwhile, Naira continues to see pressures from rising demand as the Nigerian Autonomous Foreign Exchange Fixing (NAFEX) and parallel market rates falls.
At the Investors and Exporters foreign exchange window, Naira depreciated by 0.07 per cent as the dollar was quoted at N415.10 against the last close of N414.80.
Analysts see most participants maintained bids between N405.00 and N444.00 per dollar while demand in the parallel market jumps. In the parallel market, currencies traders demand N570 to 575 to obtain a United States dollar.
Today, the average interbank rate dropped by 2.50 percentage points to close at 9.75%, following declines at both the Open Buy Back and Overnight rates.
Data from the FMDQ Exchange shows that the Overnight rate decreased by 2.50 per cent to close at 10.00 per cent as against the last close of 12.50 per cent, and the Open Repo rate also decreased by 2.50 per cent to close at 9.50 per cent compared to 12.00 per cent on the previous day.
FSDH Capital however said despite open market operation (OMO) repayment of N45.00 billion, the money market rates are likely to remain elevated in the near term.
In the treasury bills secondary market, .trading activities on Nigerian treasury bills remain muted for a sixth consecutive session with average yield across the curve remaining unchanged at 4.48 per cent, Alpha Morgan Capital said.
Average yields across short-term, medium-term, and long-term maturities closed flat at 3.39 per cent, 3.98 per cent, and 5.31 per cent, respectively.
In the OMO bills market, the average yield across the curve closed flat at 5.45 per cent. Average yields across short-term and long-term maturities remained unchanged at 5.43 per cent and 5.53 per cent, respectively, according to a note from FSDH Capital.
FGN bonds secondary market closed on a mildly negative note today, as the average bond yield across the curve cleared higher by 2 bps close at 8.12 per cent from 8.10 per cent on the previous day.
The average yield across the short tenor of the curve increased by 2 bps. However, the average yields across medium tenor and long tenor of the curve remained unchanged. The FGNSB 15-JAN-2022 bond was the worst performer with an increase in the yield of 32 bps.
Furthermore, the secondary bond market is likely to remain subdued in the short term, FSDH Capital projected. #Yields on Fixed Income Instruments Subdued as Naira Falls
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