TUE MARCH 11 2025-theGBJournal| The FGN bond secondary market were bullish on Monday, as the average yield declined by 1bp to 18.2%.
Across the benchmark curve, the average yield decreased at the short (-1bp) and mid (-2bps) segments, driven by demand for the JUL-2030 (-5bps) and FEB-2031 (-8bps) bonds, respectively, while it closed flat at the long end.
The Treasury bills secondary market was quiet, albeit with a bullish tilt, as the average yield declined by 1bp to 19.0%.
Across the curve, the average yield declined at the mid (-3bps) segment, driven by demand for the 164DTM (-3bps) bill, while it closed flat at the short and long ends. Similarly, the average yield declined by 3bps to 22.4% in the OMO segment.
The overnight lending rate increased by 483bps to 32.5% in the absence of any funding pressure on the system.
Recall that last week, the Central Bank of Nigeria (CBN) conducted a N650.00 billion (US$433.10m) Treasury Bills Primary Market Auction, attracting bids 2.96x the offer (vs. 3.44x in the previous auction).
The bid-to-cover ratio settled at 2.32x, resulting in a net issuance of N180.44bn. Stop rates for 182-day and 364-day tenors declined by 25bps and 61bps to 17.75% p.a. and 17.82% p.a., respectively, while the 90- day rate remained at 17.00% p.a.
The CBN also offered N600.00 billion (US$396.75m) in OMO bills, with subscriptions reaching 3.13x the offer amid strong system liquidity which stood at N266.56b billion (opening balance for Friday). The total sales stood at N1.68tn, implying a net issuance of N1.08tn.
The surge in demand led to a 213bps and 200bps decline in stop rates for the 355-day and 362-day maturities, now at 19.19% p.a. and 19.45% p.a., respectively.
The Bullish trend in the secondary market continued last week, as investors sought to take advantage of improved yields on shorter-dated instruments from recent auctions.
The average yield in the treasury bills market declined by 73bps to 19.16% pa due to buying interest across all the segments of the yield curve especially the mid-end of the spectrum.
The short-, mid-, and long-end of the yield curve declined by 28bps, 152bps and, 63bps to 18.41%, 18.02% and, 20.04% respectively.
In the secondary market for OMO, average yields declined by 9bps to 22.43% pa on the back of buying interest across all the market segments. The short-, mid-, and long-end of the yield range declined by 10bps, 23bps, and 2bps to 23.13%, 22.07%and 22.36% respectively.
The average yield in the FGN bond market also reduced by 8bps to 18.45% pa (vs 18.53% the previous week). The short-end of the yield curve declined by 24bps to 18.93%, the mid-end added 6bps to 18.49% and the long-end remained at 17.33%.
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