T-Bills, FGN Bond Yields Track Higher on Sell Pressures
In the secondary market, sell pressures push the average yield on Nigerian Treasury Bills higher midweek amidst the expectation that the headline inflation rate will spike further. Also, trading activities in the Federal Government (FGN) bonds were bearish, thus yield on government securities track higher.
Debt Management Office (DMO) has recently announced a plan to raise N720 billion in the next three months through re-openings of long-dated Federal Govt. of Nigeria bonds.
Following improved liquidity in the financial system, short-term rates decline moderately, and both overnight and repo rates move southward. Market data shows that the average interbank rate dropped by eight basis points to close at 13.92%.
Data from the FMDQ Exchange platform indicates that the Open Buy Back rate dropped by 17 basis points to 13.83%. Meanwhile, the overnight lending rate remained flat yet again at 14%. Alpha Morgan Capital analysts said in a market report that trading activities at the Nigerian treasury bills secondary market ended on a bearish note again.
According to separate fixed income traders’ reports, the short to mid-dated papers continued to witness sell-side pressures. This pushed the average rate inched up by 55 basis points to close at 6.80%. READ: Bond, T-Bills Yields Track Higher after Interest Rate Hike
Reversing the bullish trend spotted earlier, trading activities at the FGN bond secondary market were bearish following selling pressure at the short end of the curve. As a result, the average yield climbed by 3 basis points to close at 11.24%.
Alpha Morgan Capital note indicates that activities at the FGN Eurobond space resumed its bearish theme as investors’ negative sentiments returned following sell-side pressures across the sovereign curve. In sum, the average yield was up by 14 basis points to close at 12.89%, analysts said. #T-Bills, FGN Bond Yields Track Higher on Sell Pressures
