Yields Steady as Treasury Bills, Bonds Trade Quiet
The average yields on Treasury bills and Federal Government Bonds were steady on Tuesday as the market trades quietly after spot rates adjustment in the primary market auction last week.
In the fixed income market, liquidity position continues to impact trading activities, though investors are weighing options as a higher inflation rate widens real returns on naira assets.
MarketForces Africa reported that higher subscription levels seen in long-dated treasury bills triggered spot rates price-down while mod-tenored instruments were priced higher.
At the open market operation for OMO bills, spot rates were steady amidst rising headline inflation while fresh pressure is building in the money market.
Data from the FMDQ Exchange platform shows that the average interbank rate soared further by 55 basis points to close at 11.13%, thus reversing the previous week’s downward trend.
Traders said in their separate market notes that the Open Buy Back rate and Overnight rates inched upward as financial system liquidity lowered amidst a dearth of inflows from maturing instruments.
According to FMDQ Exchange data, the open buy back rate jumped higher by 67 basis points to close the day at 11%. Also, the overnight lending rate inched higher by 42 basis points to close at 11.25% on Tuesday.
In the secondary market for trading Nigerian Treasury bills, buying and selling activities were muted as the market weighs the impact of a higher inflation rate on their portfolios. Fixed income traders said due to a thin trading session, the average remained flat to close at 7.36%.
Market analysts and traders at Cordros Capital Limited said in a market note that the average yield was unchanged at 10.5% in the open market operations bills segment. READ: Naira Steady at Investors Window on Stable Dollar Supply
Elsewhere, there were lull proceedings in the secondary market for trading Federal Government of Nigeria (FGN) bonds. As a result, Alpha Morgan Capital reported that the average yield retained its prior position to close at 12.69%.
Traders at the firm said activities in the FGN Eurobond space were mixed. Analysts noted that bonds market players’ perspectives were conflicted due to this week’s US Fed meeting. Thus, the average yield was up by 2 basis points to close at 12.65%, according to Alpha Morgan Capital.
# Yields Steady as Treasury Bills, Bonds Trade Quiet
