Naira Falls at Investors Window as Fixed Income Securities Trade Flat

Naira Falls at Investors Window as Fixed Income Securities Trade Flat

The naira depreciated at the Investors and Exporters window by 0.36% to N411.50 for a United States dollar as average yields on fixed income instruments trade flat, again.

Yields repricing in the fixed income space has been slowed down as predicted by analysts at Atlass Portfolio limited following 2 consecutive months of disinflation.

In the money market, pressure on the financial system liquidity which continues to stay at a deficit level amidst low inflow has been pushing overnight lending and open buyback rates upward.

At the close of the market, the overnight lending rate expanded by 175 basis points to 21.0%, the development that Cordros Capital analysts attributed to the absence of significant inflows to the system.

Naira Falls at Investors Window as Fixed Income Securities Trade Flat
Naira

Meanwhile, the Nigerian Treasury Bill secondary market closed flat, as the average yield was flat at 6.4%. Similarly, the average yield at the open market operations (OMO) segment also closed flat at 9.7%.

Analysts stated that trading in the Treasury bond secondary market was mixed in anticipation of bond auction results, as the average yield stayed flat at 11.9%.

Results of treasury bills auction for last week show that spot rates on 91-day and 182-day printed at 2.5% and 3.5% respectively while 364-day slides to 9.40% from 9.64%.

At the primary market auction (PMA) mid-week, Nigeria’s Debt Management Office, DMO, offered N150 billion across three maturities, split as MAR 2027, MAR 2035, and MAR 2050 reopening.

At the Wednesday auction, the stop rate falls to 13.31% after shedding 45 basis points as all offered instruments cleared lower. MAR 2027 shed 36 basis points to 12.74%, MAR 2035 dropped off 50 basis points to 13.50%, and MAR 2050 lost 50 basis points to 13.70.

Meanwhile, N417.5 billion subscription was received, translating to a bid-cover ratio of 2.78x from 1.88x as DMO sold N325.80 billion (N50.81bn of MAR 2027, N103.90bn of MAR 2035, and N171.09bn of MAR 2050).

However, it also allotted another N4.5 billion as non-competitive allotment (N3.50bn of MAR 2027 and N1.00bn of MAR 2035), bringing cumulative issuance to N329.3 billion.

In the equity market, bloodbath continues at the local bourse as investors’ fortune declines for the third day in the week due to sell pressure. Stocks plunged by N22.2 billion due to profit-taking in the banking stocks while equities analysts are predicting that the market will end the week bearish.

In the parallel market, Naira was traded at N500 to a dollar as external reserves plunged to $33.5 billion.

Naira Falls at Investors Window as Fixed Income Securities Trade Fla