Monday, November 20, 2017 6:02:03 PM- Nigerian Stock Exchange.

  Bond market trades mixed following PMA


July 14 (Lagos) -   Inter-Bank call rate rose further amidst persistent tight system liquidity, up 25 bps to 19%. At the FX Inter-bank spot market, the Naira depreciated 22 kobo to NGN283.10/USD whilst trading at one year forward closed at NGN317.82/USD.

Buying momentum strengthened in the T-bills market with demand weighted on the short to mid dated maturities. Overall, yields declined 24 bps on average with demand most sizeable on the 28DTM (-88 bps), 35DTM (-93 bps), and 231DTM (-97 bps) bills, closing at 11.13%, 11.03% and 12.94% respectively. 

Following the technical glitch observed yesterday, the bond primary market auction held today with the DMO selling N 120 billion across the 5-yr (N30 billion), 10-yr (N 35 billion), and 20-yr (N 55 billion) bonds at stop rates of 14.50%. 14.90%, and 14.98% respectively. 

With the auction rates coming in slightly higher than secondary market levels, trading in the bond market turned mixed (with a mildly bullish bias) as buying interest picked up across the mid dated maturities, whilst sentiment remained tepid on the short end of the space.  

At week close, expect mild demand on the short end of the yield curve as investors continue to cheery-pick. For the bond market, analysts at Vetiva Capital Management Ltd in Victoria Island foresee modest sell pressure across select maturities as yield continue to trend towards auction levels.

reporting for on Thursday, July 14 2016 from Lagos, Nigeria

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