Yield on Bond with Short Tenor Rises, T-Bills Steadies
Average yield on Federal Government of Nigeria (FGN) bonds across the short tenor of the curve increased by 4 basis points on Thursday, but the Treasury bill steadies amidst quiet trading activities.
Today, the average interbank rate slumps further to a lower single digit of 3.88 per cent, sheds 100 basis points from yesterdays close of 4.88% due to the absence of funding pressures in the financial system liquidity.
Data from FMDQ Exchange tracked shows that the overnight lending rate declined by 100 basis points to close at 4.25 per cent as against yesterday’s close of 5.25 per cent.
Also, the Open Repo (OPR) rate also slowdown by 100 basis points to close at 3.50 per cent compared to 4.50 per cent on the previous day. Naira was down against the United States dollar today after the local currency had held strong in the past two days at the Investors and exporters foreign exchange window.
Trading data from FMDQ Exchange shows that Naira depreciated by 0.06 per cent as the dollar was quoted at ₦416.25 as against the last close of ₦416.00. Most participants maintained bids between ₦405.00 and ₦452.13 per dollar, according to FSDH Capital.
In the secondary market, the Nigerian T-Bills secondary market was flattish with the average yield across the curve remaining unchanged at 4.50 per cent.
Analysts noted that average yields across short-term, medium-term, and long-term maturities remained unchanged at 3.57 per cent, 4.12 per cent, and 5.29 per cent, respectively.
Elsewhere, activities at the FGN Eurobond market traded on a bearish note in today’s session – selling pressures spotted across the sovereign curve, according to Alpha Morgan Capital.
In sum, the average yield climbed by 23 basis points to close at 6.95%. In the OMO bills market, the average yield across the curve closed flat at 5.53 per cent, according to FSDH Capital.
It was also noted that average yields across short-term and long-term maturities remained unchanged at 5.53 per cent and 5.52 per cent, respectively.
FGN bonds secondary market closed on a mildly negative note today, as the average bond yield across the curve cleared higher by 1 basis point to close at 11.90 per cent from 11.89 per cent on the previous day.
Average yield across the short tenor of the curve increased by 4 bps, FSDH Capital stated in its market note. However, the average yields across medium tenor and long tenor of the curve remained unchanged.
The 14-MAR-2024 maturity bond was the best performer with a decrease in the yield of 1 basis point, while the 27-APR-2023 maturity bond was the worst performer with an increase in yield of 13 basis points.
In the absence of any trigger, FSDH Capital maintained that the secondary bond market is likely to remain subdued in the short term. # Yield on Bond with Short Tenor Rises, T-Bills Steadies
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