FGN bonds rates clear lower ahead Wednesday’s N100bn DMO auction
A graduate of Economics and Statistics from the University of Benin. An experienced researcher and business writer in the print and digital media industry, having worked as a Research Analyst at Nairametrics, Voidant Broadcasting Ltd, Entrepreneurs.ng, and currently a Market and Finance Writer at Business a.m. For stories, press releases, exclusive events, call +2347052803696 or send a mail to abuedec@gmail.com.
Bonds trading
Ahead of the scheduled bond auction by Nigeria’s Debt Management Office (DMO) on Wednesday, 15 December, 2021, where it plans to offer FGN bond worth N100 billion through the re-opening of 10-year and 20-year tenors worth N50 billion each, the FGN bonds secondary market recorded a positively mild close on Tuesday with the average bond yield across the curves clearing lower by seven basis points to close the day at 8.07 percent from 8.14 percent the previous day.
Owing to the positive demands for the fixed income securities, the average yields across short tenor and long tenor of the curve shrank by 10 basis points and one basis point, respectively.
Nevertheless, the average yield across the medium tenor of the curve remained unchanged from Monday at the end of the day. The 27-APR-2023 maturity bond stood out as the best performer with a decrease in the yield of 52 basis points, while the FGNSB 13-MAR-2022 bond was the worst performer with an increase in yield of 28 basis points.
Money market
Analysts say notwithstanding the OMO repayment of N40 billion, money market rates are likely to remain elevated in the near term as trading closed on Tuesday in the money market with Overnight (O/N) rate rising by 0.25 percent to reach 14.25 percent as against the last close of 14 percent, and the Open Repo (OPR) rate also increased by 0.25 percent to close at 13.75 percent, compared to 13.50 percent the previous day.
Meanwhile, in the OMO bills market, the average yield across the curve closed flat at 5.48 percent while the average yields across short-term, medium-term, and long-term maturities remained unchanged at 5.47 percent, 5.51 percent, and 5.54 percent, respectively.
Treasury Bills trading
Elsewhere, the Nigerian Treasury bills secondary market closed on a flat note with the average yields across the curve remaining unmoved at 4.48 percent. Also, average yields across short-term, medium-term, and long-term maturities closed flat at 3.51 percent, 3.74 percent, and 5.18 percent, respectively.
However, the CBN is scheduled to conduct a Primary Market Auction on Wednesday to roll over Nigerian Treasury bills maturities worth N5.86 billion across 91-day (N0.96 billion), 182-day (N1.10 billion, and 364-day (N3.80 billion) tenors, respectively.
FX market
And in the currency market, the Naira depreciated by 0.18 percent at the Investor & Exporters’ FX market, as the dollar was quoted at ₦414.80 as against the last close of ₦414.06. It also stayed unmoved at the CBN official window at ₦411.72 per dollar as most participants maintained bids at between N405 and N444 per dollar.