Bonds, OMO, T-Bills Yields Steady as Market Trades Cold
Patience Oniha, Director-General, Debt Management Office

Bonds, OMO, T-Bills Yields Steady as Market Trades Cold

The average yields across local debt instruments in the fixed income market was flattish again midweek amidst a healthy liquidity position in the financial system.

Analysts expect the yield to buck the trend as banks are expected to sell down their holdings to meet their respective funding requirements, Cordros Capital hinted in a market note.

Some fixed income analysts told MarketForces Africa nothing moved today amidst healthy financial system liquidity despite a selloff in the equity space where MTN lost 10% of its opening share price.

In the money market, short term interest rates have been on the decline from early in the week as the interbank rate sees a persistent slowdown.  The average interbank rate dropped by 188 basis points to 15.63%, according to Alpha Morgan Capital.

Data from the FMDQ Exchange platform tracked by MarketForces Africa shows that the overnight lending rate (OVN) rate dropped off 200 basis points to close at 15.75 per cent as against the last close of 17.75 per cent.

Also, the Open Buy Back (OBB) rate declined by 175 basis points to close at 15.50 per cent compared to 17.25 per cent on the previous day.

In the treasury space, trading activities in the T-bills secondary market closed on a flat note with the average yield across the curve remaining unchanged at 4.80 per cent, according to various analysts’ notes.

FSDH Capital spotted that average yields across short-term, medium-term, and long-term maturities closed flat at 3.52 per cent, 4.30 per cent, and 5.70 per cent, respectively.

In the OMO bills market, the average yield across the curve closed flat at 5.50 per cent, according to analysts. There has been a slowdown in yield in the segment amidst inconsistent issuance by the monetary authority.

FSDH Capital however added that average yields across short-term, medium-term, and long-term maturities remained unchanged at 5.36 per cent, 5.54 per cent, and 6.14 per cent, respectively.

Elsewhere, FGN bonds secondary market closed on a flat note today, as the average bond yield across the curve closed flat at 8.00 per cent.  Likewise, the average yields across the short tenor, medium tenor, and long tenor of the curve remained unchanged.

The FGNSB 11-DEC-2021 and FGNSB 12-DEC-2021 bond were the best performers with a decrease in the yield of 2 basis points each, while the FGNSB 12-FEB-2022 and FGNSB 13-FEB-2022 bond were the worst performers with an increase in yield of 2 basis points each.

FSDH Capital said in its market note that the secondary bond market is likely to remain subdued in the short term.

Also, activities at the FGN Eurobond market traded on a bullish note following buying interests across the sovereign curve as the average yield was down by 7 basis points to close at 7.59%. # Bonds, OMO, T-Bills Yields Steady as Market Trades Cold

Read Also: T-Bills Investors See Steady Yield After Quiet Trading Activities

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