Jan 20 (Lagos) - On the back of relatively tighter system liquidity (NGN 264 billion), inter-bank placement rates advanced across most tenors with the Call rate up 48 bps to 2.85%. At the FX inter-bank market, the Naira remained unchanged at NGN 199.05/USD, after recording an intra-day low of NGN199.30/USD.
Ahead of the release of today’s auction results, mixed sentiments trailed the T-bills market (albeit with a modest yield down tick bias), as sell pressure across the shorter dated bills (yields up 7bps on average) was outweighed by gains in the mid-longer dated maturities (yields 20bps down on average).
Whilst the yield on the 22DTM bill climbed 25bps to 0.85%, yield on 190DTM bill declined 42bps to 7.39%. Similarly, sentiment turned mixed in the bond market as selling ensued across the mid-longer tenured maturities (yields up 12bps on average), whilst buying persisted on the shorter maturity bonds (yields down 28bps on average).
Notably, yield on the 16.39% FGN JAN 2022 bond rose 19bps to 12.22%, whilst yield on the 15.10% FGN APR 2017 bond shed 38bps to 9.89%.
At the bond auction, NGN80 billion was sold across the 5-yr and 10-yr (new issue) bonds clearing at stop rates of 12.243% and 12.50% respectively. Also, the CBN sold a total of NGN196 billion across the 91DTM, 182DTM and 364DTM bills at effective yields of 4.34%, 7.89% and 10.29% respectively.
Given the higher rates recorded at both auctions compared to current yield levels in the secondary market amidst relatively tight system liquidity, analysts at Vetiva Capital Management Ltd in Victoria Island expect yields to trend upwards across most maturities in the fixed income market tomorrow.