Nigeria’s bond market remains muted as CBN sells N18bn OMO bills

The Nigerian bond market remained largely muted Wednesday with modest buying interest on select maturities as against growing demand for treasury bills at the Open Market Operation (OMO) auctions where the Central Bank sold bills worth N18 billion.

The apex bank had offered N15 billion but eventually sold N18 billion across the 191DTM and 345DTM bills at respective stop rates of 17.90% and 18.60% (effective yields: 19.87% and 22.57%)

Yields on the bills moderated 15bps on average. Buying interest was most notable on the short dated bills with yields on the 51DTM, 58DTM and 72DTM bills declining 46bps, 130bps and 67bps to 17.30%, 18.71% and 18.06% respectively.

According to dealers, there are expectations that liquidity would continue to support buying interest in the bills, whilst the bond market remains relatively quiet.

The huge interest in the OMO bills consequently affected rates at the interbank market where call rate rose 258bps to 11.91%.

In the bonds market yields on the 14.50% FGN JUL 2021 and 16.2884% FGN MAR 2027 bonds declined 4bps each to close at 16.39% and 16.27% respectively. As a result average yields fell by 15ps to settle at 20.1%.

At the NAFEX window, the naira appreciated by 0.76 against the dollar to close at 378.67. On the other hand, liquidity tightened in the money market as the NIBOR, which drop dipped by 0.34% to settle at 9.1% on average.