Fixed Interest Securities Yields Steady as Naira Slides to N430
Yields move on a smooth plain on Thursday due to a thin trading session in the Nigerian Treasury bills while Bonds traders increase their book size. In the money market, healthier liquidity has continued to drag rates lower after weeks long pressures.
Data from the FMDQ Exchange platform shows that the open policy rate (OPR) declined while the overnight rate (O/N) slowdown further on Thursday – consolidating on a downward trend that started in the week.
The overnight lending rate contracted by 117 basis points to 7.5%, a level that Cordros Capital market analysts attributed to the absence of any significant funding pressure on the system.
In the secondary market, trading activities on Treasury bills instruments remained quiet, according to traders’ notes. The average yield was flat at 7.8% as thin trading activities held down movement around the curve – the same pattern of trade witnessed yesterday.
Meanwhile, the Nigerian naira sheds value again, trading at N430 to a United States dollar after a 0.1% drop at the Investors and Exporters foreign exchange window. READ: Naira Sinks to N430 at Official Window
The local currency will likely hit the resistance level of N431 to a greenback before it sees a moderate gain to N429, the pattern that the exchange rate has sustained in months. Elsewhere, the average yield on the Central bank of Nigeria (CBN) instruments contracted by 5 basis points to 11.1% in the open market operations (OMO bills) segment.
MarketForces Africa reported that Nigeria’s debt office has raised more than N5.8 trillion from the beginning of the year to date from the debt capital market via FGN Bonds sales. Likewise, the Central Bank has raised some N3.4 trillion in the last eight months.
In the secondary market for bonds, market analysts said trading activities were mixed, although with a bullish tilt, according to Cordros Capital. The trading style was the average yield paring by a basis point to 12.7%.
Across the benchmark curve, traders at Cordros Capital stated that the average yield contracted at the short (-2bps) end as investors demanded the MAR-2025 (-9bps) bond. On the other hand, the average yield closed flat at the mid and long segments. # Fixed Interest Securities Yields Steady as Naira Slides to N430