Sell Pressures Push T-Bills, Bond Yields Higher
In the secondary market for debt capital, the average yield on Nigerian Treasury Bills rises on Monday due to selling pressures at the end of the curve as Broadstreet differs on interest rate direction in the fiscal year 2022.
Low-interest rate environment, records of strong subscription levels at primary market auction, in addition, to slow down inflation have subdued returns on fixed securities instruments.
Following warm trading activities last week, proceedings at the Federal Government of Nigeria bond secondary market were mixed, albeit with a bullish bias, as the average yield pared by a basis point to 11.4 per cent.
Due to healthy financial liquidity, the average interbank rate shaved off 25 basis points to close at 14.13per cent, Alpha Morgan Capital note shows.
Data from FMDQ Exchange indicates that the financial liquidity position remains strong enough to accommodate funding pressures in the financial markets.
Meanwhile, analysts hinted that the slowdown in interbank rate resulted from a 25 basis points drop in both the Open Buy Back rate and Overnight rate to close at 13.75per cent and 14.50 per cent.
In the Nigerian Treasury Bills secondary market, trading activities ended with mixed sentiments, according to fixed income analysts.
There was buying interest at the short & mid ends of the Treasury curve while sell-side pressure was witnessed at the long end, according to Alpha Morgan Capital note.
Consequently, the average yield climbed by 35 basis points to close at 4.58 per cent. But the average yield was flat at 5.5 per cent in the open market operations (OMO bills) segment.
Elsewhere, the market records sell down in the Federal Government of Nigeria (FGN) bonds ahead of the Debt Management Office announcement for the fiscal year 2022 borrowings programme.
Amidst cautious investors trading pattern, the FGN bond secondary market ended mixed following a 1.42 percentage point climb witnessed at the short end of the curve, a decline of 15 basis points at the mid-end of the curve.
Meanwhile, the long end of the curve remained flat, according to analysts. As a result, the average yield went up by 35 basis points to close at 11.94per cent.
In the FGN Eurobond market, the average yield on the instrument cleared lower as the price jumped following a bullish tendency spotted in today trading session.
Alpha Morgan Capital note indicates that there was buy-side pressure in the secondary market across the sovereign curve. Consequently, the average yield dropped by 48 basis points to close at 6.96per cent. #Sell Pressures Push T-Bills, Bond Yields Higher
