ICYMI: Naira gained N2 on streets, bonds went flat; T-bills in high demands 

The Naira gained N2 on the dollar on the street FX market to trade at N506 to a dollar on Wednesday, up from the previously traded N508 to a dollar. At the Investors’ and Exporters’ Window (I&EW), the Naira was stable for the second straight day at N411.50 to a dollar. Most participants maintained bids of between N400 and N412.70 per dollar.

Also, system liquidity remained positive at N155 billion compared to N157.3 billion on Tuesday. As a result, funding pressure was mild, with the Open Buy-back and Overnight rate at 8.5 percent and 9.0 percent, from 7.5 percent and 8.0 percent respectively.

The Nigerian Treasury bills market was somewhat bullish on Wednesday due to buying interests on the long end of the curve even as the rest of the market ended flat. Against that background, the average yield across the curve decreased by 1 basis point to close at 5.72 percent. Also, average yield across the long-term yields weakened by 2 basis points. Conversely, the average yields across short-term and medium-term maturities closed flat at 3.26 percent and 4.75 percent, respectively. High demand in the 14-Jul-22 maturity bill drove a yield decline of 17 basis points, while yields on 20 bills remained unchanged.

Elsewhere in the OMO bills market, the average yield across the curve lessened by 6 basis points to close at 8.06 percent. There was a growing demand across the short-term maturities with the average yield dropping by 17 basis points, while the average yield across the long-term maturities increased by 2 basis points. However, the average yield across the medium-term maturities closed flat at 8.10 percent. While yields on 4 bills compressed with the 28-Sep-21 maturity bill recording the highest yield decrease of 77 basis points, yields on 16 bills remained unchanged.

Meanwhile, the bond space traded flat due to the offsetting impact of demand across the intermediate segment as the average bond yield across the curve cleared lower by 3 basis points to close at 9.12 percent. Average yields across short tenor and medium tenor of the curve declined by 4 basis points and 2 basis points, respectively. However, the average yields across the long tenor of the curve increased by 3 basis points. The best performing bond for the day was the FGNSB 16-AUG-2022 bond with a decline in yield of 15 basis points, while the 18-APR-2037 maturity bond emerged as the worst performer with an increase in yield of 19 basis points.