Tuesday, January 23, 2018 7:11:57 AM- Nigerian Stock Exchange.

  Yields climb higher at bond and bill auctions


Sep 15 (Lagos) - Amidst relatively tight system liquidity, Interbank Call rate climbed 800bps to 23.83%. At the FX inter-bank market, the Naira appreciated N4.31 to N306.33, the lowest close since July.

The CBN conducted a Primary Market Auction yesterday, offering and eventually selling N48.1 billion, N48.5 billion, and N86.7 billion of the 91DTM, 182DTM, and 364DTM bills at stop rates of 14%, 17.77%, and 18.48% respectively. With respective effective yields of 14.51%, 19.50%, and 22.66%, the bills settled marginally above corresponding secondary market levels. 

In addition, the DMO offered N120 billion across the 5-year, 10-year and 20-year bonds at the monthly bond auction. Ultimately, the DMO sold N15 billion, N30 billion, and N60 billion on the 5-year, 10-year, and 20-year bonds with low subscription levels driving marginal rates to 15.1430%, 15.5357%, and 15.5974% respectively. 

Activity in the secondary market was mixed in the T-bills space with yields 11bps higher on average. Sell pressure was most evident on the short-dated maturities as yields on the 22DTM (+123bps) and 36DTM (+123bps) bills settled higher at 16.93% and 16.80% respectively. Meanwhile, on-the-run bond yields inched 6bps higher on average as traders went short in anticipation of higher rate from the bond auction held today. 

Notably, the yields on the 12.50% FGN JAN 2026 and 12.40% FGN MAR 2026 bonds – both on offer at the auction – advanced 12bps each to settle at 15.42% and 15.45% respectively.

Following the result of the two auctions held yesterday, analysts at Vetiva Capital Management ltd in Victoria Island expect bearish sentiment to persist as yields converge towards auction levels.

reporting for easykobo.com on Thursday, September 15 2016 from Lagos, Nigeria

Source - analysts at Vetiva Capital Management Ltd in Victoria Island

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