DMO to Auction More Bonds as Yield Falls
The average yield on Federal Government bonds fell 10 basis points in the secondary market, thus Nigeria’s debt office has initiated a plan to add more to first quarter borrowing via the fixed income market.
On March 21, Nigeria’s Debt Management Office has said it will offer Federal Government (FGN) Bonds worth N160 billion this month following its revised issuance Calendar for the first quarter of 2022.
According to DMO, total offer FGN bonds worth between ₦140 – ₦160 billion will be auctioned on March 21 through re-opening of 10-year (₦70-₦80 billion) and 20-year (₦70-₦80 billion) tenors.
In January, DMO announced a plan to raise N480 billion worth of FGN Bonds in the first three months in the year via the debt market. However, it has exceeded with year to date raised totalled N586 billion, FSDH Capital said in a market report.
In the money market, strong liquidity dragged rates downward on Tuesday. The average interbank rate dropped as both overnight and open buy back falls.
Tracked market data from the FMDQ Exchange platform shows that the overnight lending rate decreased by 200 basis points to close at 10.33 per cent as against the last close of 12.33 per cent.
Also, the Open Repo rate also decreased by 200 basis points to close at 9.67 per cent compared to 11.67 per cent on the previous day.
Despite OMO repayment of ₦70.00 billion, the money market rates may remain elevated in the near term, FSDH Capital said in its analysts’ note. Read: T-Bills Yield Falls Below 4% as CBN Holds Auction
Meanwhile, trading activities on Nigerian Treasury Bills secondary market closed with average yield across the curve increasing by 1 basis point at 3.68 per cent from 3.67 per cent on the previous day.
Fixed income traders at FSDH Capital reported that the average yield across the long-term maturities expanded by 2 basis points. However, the average yields across short-term and medium-term maturities closed flat at 3.03 per cent and 3.42 per cent, respectively.
Traders’ note shows that NTB 26-Jan-23 (+8 bps) and NTB 10-Nov-22 (+1 basis point) maturity bills witnessed selling pressure, while the yields on 9 bills remained unchanged.
In the OMO bills market, the average yield across the curve closed flat at 3.92 per cent. The average yield across the long-term maturities remained unchanged at 3.92 per cent.
FGN bonds secondary market closed on a mildly positive note today, as the average bond yield across the curve cleared lower by 10 basis points to close at 10.81 per cent from 10.91 per cent on the previous day.
Average yields across short tenor and medium tenor of the curve declined by 21 basis points and 19 basis points, respectively.
However, the average yield across the long tenor of the curve remained unchanged. The 26-APR-2029 maturity bond was the best performer with a decrease in the yield of 95 basis points. #DMO to Auction More Bonds as Yield Falls
