…Across the benchmark curve, the average yield expanded at the short (+15bps) end due to profit-taking activities on the MAR-2025 (+69bps) bond
…The overnight lending rate contracted by 130bps to 28.7% in the absence of any significant inflows into the system.
MON SEPT 30 2024-theGBJournal| The FGN treasury bond yield advanced Monday, as the average yield expanded by 4bps to 18.6%.
Across the benchmark curve, the average yield expanded at the short (+15bps) end due to profit-taking activities on the MAR-2025 (+69bps) bond but closed flat at the mid and long segments.
The FGN Eurobonds Market saw mixed performance last week. The market started in a bearish mood due to weaker U.S. manufacturing data, but sentiment shifted as oil prices increased amid Middle East tensions.
Consumer confidence also dropped significantly in the U.S., contributing to the volatility.
Despite fluctuations in crude prices, the market remained bearish, influenced by China’s economic stimulus and potential supply-side factors impacting oil prices. Week-on-week, the average benchmark yield declined by 3bps to close at 9.39%.
Last week, the Central Bank of Nigeria (CBN) offered a total of N227.54 billion across the 91-day, 182-day, and 364-day maturities at the Primary Market Auction which took place mid-week.
Subscription came in at N304.27 billion, indicating an oversubscription of N76.72 billion, while total sales equaled the total amount offered. Yields across the trio maturities rose by 40bps, 60bps and 216bps, respectively to 17.75%, 19.17%, and 24.98%.
Market liquidity was fluid last week, and this prompted two OMO auctions after the Treasury bill auction on Wednesday.
The CBN offered a total of N1 trillion across three maturities. Only the 361-day and 362-day bills recorded subscriptions, leaving the total amount offered undersubscribed by N502.1 billion. Total sales reached 254.9 billion.
The yield on the 361-day bill settled at 31.99%.
Trading activities in the Treasury bills secondary market was quiet as the average yield closed flat at 21.9%. Across the curve, the average yield declined at the short (-3bps) and long (-4bps) ends due to demand for the 73DTM (-4bps) and 339DTM (-4bps) bills, respectively.
Meanwhile the average yield increased at the mid (+9bps) segment due to selloffs of the 178DTM (+89bps) bill. Elsewhere, the average yield declined by 5bps to 23.6% in the OMO segment.
The overnight lending rate contracted by 130bps to 28.7% in the absence of any significant inflows into the system.
At the forex market, the naira depreciated by 0.1% to N1,541.94/USD at the Nigerian Autonomous Foreign Exchange Market (NAFEM), after closing at N1,540.78/US$1 last weekend.
By contrast, the rate at the parallel market slumped 1.47% to settle at N1,700.00/US$1 after reaching an all-time low of N1,710.00/US$1. Demand for travel and foreign tuition, as well as imports (as we approach the festive season) are the likely drivers.
The official rate now trades at a premium of 10.33% to the street market.
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