FGN Bonds, T-Bills Yields Mixed as Naira Crashes

FGN Bonds, T-Bills Yields Mixed as Naira Crashes

The average yield on fixed income market instruments diverge as the Nigerian naira crashed heavily in the Investors and Exporters foreign exchange (FX) window to N434.75 to a United States dollar.

In the money market, short term rates experience yet another round of pressure on Monday due to a strained liquidity level in the financial system. Consequently, the Nigerian Interbank Offered Rate (NIBOR) moderated for the majority of maturities.

In a market note, market analysts at Cowry Asset Management said local deposit money banks requested lower rates, despite the open buyback rate and the overnight lending rate rising by six and five basis points, respectively to 12.67% and 13.17%.

In the secondary market for trading Nigerian Treasury bills, trading activities were mixed, albeit with a bullish tilt, as the average yield pared a basis point to 7.7% following buying interest in short-dated bills.

Across the curve, Cordros Capital said the average yield contracted at the short (-1bp) and mid (-1bp) segments following mild interests in the 80-day to maturity (-1bp) and 157-day to maturity (-1bp) bills, respectively.

The average yield was flat at the long end, according to market analysts’ notes reviewed. Elsewhere, the average yield contracted by a basis point to 11.1% in the open market operation (OMO bills) segment.


In the bond market, as the average yield on FGN notes expanded by eighteen (18) basis points to 12.9% over bullish trading activities witnessed at the beginning of the week. READ: Bond Yield Crashed to 13.17% ahead of DMO’s Auction

Across the benchmark curve, Cordros capital wrote that the average yield expanded at the short (+55bps) and long (+2bps) ends as investors took profits off the APR-2023 (+291bps) and APR-2037 (+23bps) bonds, respectively.

Conversely, the average yield was unchanged at the mid-segment. In the over-the-counter bond market, the values of FGN bonds and the FGN Eurobonds tracked were muted for most maturities tracked, traders said. # FGN Bonds, T-Bills Yields Mixed as Naira Crashes

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