By 
Spot rates on Open Market Operations (OMO) Bills were steady as the Central Bank of Nigeria (CBN) sold bills worth N50 billion at the primary market auction yesterday, the result shows.
CBN auction result indicates that Spot rates for short-dated OMO Bills printed at 7%, 8.5% for mid and 10.10% for long-dated. It was noted that the auction was oversubscribed amidst cautious trading sessions in the fixed income market.
However, there was duration apathy amidst improving macroeconomic data. Auction results from the apex bank show that investors favoured mid-tenored instruments.
In the New Year, investors have been positioning more heavily in the short to mid duration as the market expects implementation of borrowing plans by Nigeria’s Debt Management Office.
In 2021, from tepid opening levels, average rates on fixed interest instruments expanded by an average of 4%, according to Market data obtained by MarketForces Africa.
In the secondary market, the average yields on Treasury and OMO Bills ended flattish this week. Analysts see the yield curve remaining subdued until some sort of market catalysts surface given a healthy subscription level in the past primary market auctions.
In the money market, the average interbank rate which printed at 3.88% yesterday witnessed a steep increase on Friday due to liquidity pressures in the financial system.
The increase in money market rates, which appears to be heavy, was triggered by Central Bank FX retail auction debits.
Data from FMDQ Exchange shows that the overnight lending rate increased by 1050 basis points to close at 14.75 per cent as against the last close of 4.25 per cent.
Also, the Open Repo rate expanded steeply by 1050 basis points to close at 14.00 per cent compared to 3.50 per cent on the previous day.
The Treasury bills market remains relatively sluggish amidst investors’ cautious position. In the secondary market, the Nigerian T-Bills closed on a flat with the average yield across the curve remaining unchanged at 4.59 per cent.
Analysts said in separates note that average yields across short-term, medium-term, and long-term maturities remained unchanged at 3.51 per cent, 4.12 per cent, and 5.29 per cent, respectively.
Similarly, the OMO bills market ended cold following a robust subscription at the primary market auction conducted by the CBN on Thursday.
In the secondary market for OMO Bills, the average yield across the curve steadies at 5.52 per cent. FSDH Capital note also shows that average yields across short-term and long-term maturities closed flat at 5.53 per cent and 5.52 per cent, respectively.
Comments