Debt Market Rates Closed Flat after Quiet Trading Session
Fixed income market rates closed flat Thursday after a cold outing as investors wait on the sideline ahead of the central bank’s monetary policy committee meeting scheduled for next week.
Amidst slacken inflation rate, there is an ongoing market rout in the equities space, as stocks blood bath pushed market capitalisation below N20 trillion mark.
The Federal Government of Nigeria (FGN) bond secondary market traded on mixed sentiments. As a result, average yields closed higher by 2bps to close at 12.33%.
In the financial system, liquidity position took a further dive from Wednesday’s deficit of N201.5 billion to N270.3 billion, which Chapel Hill Denham said was fueled by repurchase agreement transactions.
Following this, the Open Buy Back and the Overnight rates spiked by 0.5 and 0.25 percentage points to 15% and 15.25% respectively driven by demand pressure for short-term financing.
“We expect money market rates to print marginally higher tomorrow on the back of settlement of the bond auction that held on Wednesday”, Chapel Hill Denham said.
It was noted that sentiments in the fixed income market were flattish on average, reflecting a quiet trading session in the market.
At the front end of the curve, the Nigerian Treasury Bills (NTB) and open market operations (OMO) benchmark curves retained their average yield at 5.15% and 8.63% respectively.
Fixed income analysts said trading was relatively flat in the bond market with few movement in the intermediate and long end of the curve, while the short end of the curve was flat, the intermediate-end expanded by 2bps and the long-end expanded by 4bps.
“Overall, the movement in the yield curve was flat”, Chapel Hill Denham said in a market report..
In a related development, the Nigerian local currency, naira, declined by 0.14% or 14 kobo against the United States to close at 411.31 in the Investor & Exporter window.
In the parallel market, the NGN closed flat against the greenback at 484.00 as external reserves extended decline, closing lower by 0.5% over a week to US$34.40 billion.
Debt Market Rates Closed Flat after Quiet Trading Session
