SAT, SEPT 09 2023-theGBJournal |The financial market encountered a decline in system liquidity over the course of the week, primarily attributed to the N214.73bn NTB auction settlement on Thursday followed by CRR debit by the apex bank.
Accordingly, the Open Buy Back rate (OBB) demonstrated a noteworthy surge of 1616 bps in a week-on-week comparison, culminating at 17.83%.
Simultaneously, the Overnight rate (O/N) observed a substantial 1633 bps increase, reaching a conclusion at 18.75%.
”We expect rates to drop next week on the back of anticipated Coupon inflow,” says analysts at Comercio Partners Research.
At the Treasury Bills secondary market, the start of the week was characterized by a subdued atmosphere.
This was primarily due to market participants directing their focus towards the PMA auction organized by the DMO.
As the trading day progressed, some activity on the mid to long end of the curve was witnessed, with offers made on the July & August 2024 maturities.
At the mid-week NTB auction, the DMO offered and sold N214.73 billion across the standard maturities.
The stop rates on the 91-day, 182-day and 364-day bills closed at 5.19%, 8.00% and 13.97%, representing declines of 69bps, 100bps and 142bps from previous auction levels.
At the FGN Bond Market, there was a notable inclination toward selling interest in both mid and long-term maturities in the FGN Bonds market.
This upswing in selling momentum found reinforcement following the NTB auction settlement and CRR debit which mopped up excess system liquidity.
Contrasting with the prior week, the average benchmark yield encountered an uptick of 12 bps, culminating in a closing rate of 14.31%.
The Eurobond market traded with bearish sentiment for the most part of the week with selling activities seen on securities traded across board. As a result, the week witnessed a discernible impact on the average benchmark yield, which advanced by 6 bps, eventually stabilizing at a closing rate of 11.10%.
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