ICYMI: Naira up, T-bills yields rise on falling rates as bonds hang in red, Tuesday

After hitting an all-time low of N527 per dollar at the parallel market on Monday, the weakest in over four years,  the naira once again found ground with a N1 appreciation to N526 to the dollar to close the month  with a 2.73 percent decline against the greenback in the face of a major foreign exchange scarcity.

At the investors’ and exporters’ FX window, the Naira appreciated by 0.13 percent as the dollar was quoted at N411.08 as against the last close of N411.63, with most participants maintaining bids at between N400 and N415.20 per dollar.

In Tuesday’s money market trading,  the overnight (O/N) rate decreased by 0.67 percent to close at 6.50 percent as against the last close of 7.17 percent, and the Open Buy Back (OBB) rate decreased by 0.50 percent to close at 6.00 percent compared to 6.50 percent on the previous day.

In the Nigerian treasury bills secondary market, it was a bullish close with the average yield across the curve lessening by 15 basis points to close at 4.58 percent from 4.73 percent the previous day, while the average return across the short-term maturities waned by 51 basis points. On the other hand, the average yields across medium-term and long-term maturities remained flat at 3.89 percent and 6.04 percent, in that order. The yields on six bills compressed with the 11-Nov-21 maturity bill recording the maximum yield decrease of 106 basis points, while yields on 13 bills remained unchanged from the previous sessions.

Elsewhere in the market, the average yields across the curve increased by four basis points in the OMO bills market to close at 6.08 percent as against the last close of 6.04 percent. As a result of selling pressure, which was seen across the medium-term maturities, the average yields increased by nine basis points, while the average yield across the long-term maturities declined by eight basis points. Conversely, the average yield across the short-term maturities stayed flat at 5.47 percent with the yields on five bills advancing. Thus, the 1-Feb-22 maturity bill recorded the highest yield increase of 32 basis points, while yields on 14 bills remained unchanged.

In the absence of any trigger at the secondary bond market, the FGN bonds market closed on a mildly negative note on Tuesday as the average bond yield across the curve cleared higher by nine basis points to close at 8.38 percent from 8.29 percent the previous day. Average yields across the short tenor, medium tenor, and long tenor of the curve increased by 11 basis points, one basis point, and two basis points, respectively.

The FGNSB 11-SEP-2021 bond was the best performer with a decline in yield of 50 basis points, while the 27-APR-2023 maturity bond was the worst performer with an increase in yield of 33 basis points.