Naira steady at N515/$1 as T-bills, bonds stay bullish ahead bond auction

The Nigerian Naira stayed calm at N515 per dollar for the fifth consecutive day in the parallel market segment of the foreign exchange market despite oil price fluctuations in the global oil market.  But at the investors and exporters’ window it appreciated 0.04 percent to close at N411.50 to the greenback from the previous close of N411.67. However, most market traders retained their bids at between N400 and N415 per dollar.

In the fixed income segment of the financial market, there was a 0.17 basis points increase in overnight rate to 17.67 percent from the 17.50 percent at the last session, while the open buy-back (OBB) rate stayed unmoved at 17 percent.

And in the treasury bills market, the Nigerian treasury bills secondary market traded in the bullish region on Tuesday with the average yields across the curve decreasing by 32 basis points to close at 4.58 percent from 4.90 percent due to mixed buying interest across the curves.

Consequently, the average yields across the medium-term and long-term maturities fell by 2 basis points and 66 basis points, respectively. On the other hand, the average yield across the short-term maturities remained unchanged at 3.33 percent as yields on 11 bills compressed with the 14-Jul-22 maturity bill recording the highest yield decrease of 120 basis points, while yields on 10 bills remained unchanged.

In the OMO bills market same Tuesday, the regular return across the curve decreased by 10 basis points to close at 7.55 percent as against the last close of 7.65 percent. Buying interest was seen across the short-term maturities with the average yields falling by 25 basis points. Though, the average yields across medium-term and long-term maturities remained unchanged at 7.59 percent and 8.50 percent correspondingly as buying interest was seen in the 7-Sep-21 maturity bill with a yield decrease of 223 basis points, while yields on 22 bills remained unchanged.

Elsewhere, it was a bullish outing for the FGN bond market on Tuesday ahead of the scheduled N150 billion Wednesday bond auction by Nigeria’s Debt Management Office through the re-opening of 10-year (N50 billion), 20-year (N50 billion), and 30-year (N50 billion) tenors. The average bond yield across the curve tanked lower by 22 basis points to close at 8.63 percent from 8.85 percent on the previous close, with the yields across the short tenor and medium tenor of the curve decreasing by 27 basis points and 9 basis points, respectively; and the average yield across the long tenor of the curve remained unchanged. Thus, the FGNSB 16-AUG-2022 bond was the best performer with a decline in yield of 103 basis points.