Nigeria’s Bond Trades Flat, Naira Falls Slightly

Nigeria’s Bond Trades Flat, Naira Falls Slightly

Trading activities on Nigeria’s bond traded on a relatively flat note midweek, albeit with a bullish tilt, as investors, and fixed income traders shifted their attention to the primary market auction conducted by the apex bank.

Thus, the prices of FGN Bonds remained relatively flat for the bulk of maturities, according to analysts’ notes despite the average secondary market yield contracting by two basis points to 14.30%.

Across the benchmark curve, the average yield contracted at the short (-2bps) and long (-5bps) ends as investors demanded the MAR-2027 (-7bps), and MAR-2035 (-33bps) bonds, respectively.

Traders’ notes showed that the average yield closed flat at the mid-segment. In a market note, Cowry Asset Management told clients that the yields on the 10-year and 15- year bonds declined to 13.95% (from 14.03%) and 14.43% (from 14.75%), respectively.

The slowdown in their respective yield line came following buy interest, while the yields on the 20-year and 30-year FGN bonds remained unchanged at 15.88% and 14.72%, respectively, according to Cowry Asset Management.

Elsewhere, the value of the FGN Eurobond decreased for most maturities tracked by Cowry Asset Limited analysts amid sustained bearish sentiment. Hence, the average yield expanded by 10 basis points to 11.82%.

In the foreign exchange (FX) market, the Naira weakened further against the United States (US) dollar to close at N445.83 from N445.80 amidst relatively steady foreign currency demand. READ: Yields on Bonds, T-Bills, OMO End Flat as Naira Gains

In the money market, short-term rates decline further due to healthy liquidity in the financial system. Data from FMDQ Exchange show that the Open Repo (OPR) and the overnight lending Rate (OVN), narrowed to 10.00% and 10.38%, respectively.

Specifically, the overnight lending rate contracted by 50 basis points to 10.38%, in the absence of pressures on liquidity in the financial market today. On that note, trading in the Nigerian Treasury bills secondary market was quiet with thin trading spotted amidst declining spot rates on CBN auction.

Thus, the average yield remained unchanged at 11.0% as the spot rate on 364-day bills fell to 13.05% and the 182-day bills dropped to 8% at the primary market auction today while the 91-day bill remained flattish.

Across the curve, Cordros Capital analysts stated that the average yield closed flat at the short and mid segments but pared at the long (-1bp) end following buying interest in the 329-day to maturity (-1bp) bill.

Also, the average yield was unchanged at 10.1% in the OMO bills segment. CBN auction results showed that primary market stop rates for 182 and 364-day T-bills declined to 8.00% (from 8.05%) and 13.05% (from 14.84%), respectively. #Nigeria’s Bond Trades Flat, Naira Falls Slightly

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