In its customary quest to mop up excess system liquidity (
N641.0bn as at Thursday), the CBN conducted an OMO auction offering N450.0bn for the 91 and 203-day tenors respectively. While the shorter end was 72.6% under-subscribed ( N100.0bn offered vs. N27.4bn subscription), the longer tenor was 99.9% subscribed ( N350.0bn offered vs. N349.6bn subscription) as a result of a better yield on the 203-day maturity compared to yields on the long-term T-Bills secondary market instruments.
Please see indicative rates for today below:
|Maturity||Tenor (Days)||Rate (%) p.a.||Yield (%) p.a.|
A Primary Market Auction (‘’PMA”) is slated to hold on Wednesday with the CBN offering
N33.4bn across the 91, 182 and 362-day maturities. In addition to the maturing T-Bills of N33.4bn. Additionally, an injection of N440.0bn from OMO maturities is expected to boost system liquidity. This week we expect to see more activities in the T-Bills market particularly at the longer-end of the curve at the PMA and also anticipate an excess system liquidity mop-up by the Apex bank towards the end of the week.
Please see our expectations for the PMA below:
|Tenor||Amount on Offer||Previous Stop Rate||Expected Stop Rate|
FGN Bonds Market Update: Off-Shore Investors Sell-off amidst Political Tensions, Bond Auction Slated for Wednesday
Last week, the bullish sentiment in the domestic bonds market was reversed as investors sold off their positions on the back of negative political headlines towards mid-week. Major sell-offs were witnessed on the 2027 (+48bps) and 2036 (+25bps) instruments. Consequently, average yields across all instruments advanced 27bps to close at 13.77%.
Due to the Muslim holidays, the DMO moved the bonds auction previously slated for August 22nd forward to August 15th with a total of
N90.0bn on offer- N25.0bn apiece of the APR-2023 and MAR-2025 maturities and N40.0bn of the FEB-2028 maturity.
Please see indicative bond rates for today below:
|Bond||Tenor (Years)||Yield (%)||Coupon (%)||Implied Price (N)|
This week, we expect to see bargain hunting by investors particularly on instruments with lower prices and higher yields and also anticipate a bullish performance at the FGN bonds auction slated for Wednesday (where the DMO will re-issue 12.75% FGN APR 2023, 13.53% FGN MAR 2025 and 13.98% FGN FEB 2028)on the back of a boost in system liquidity.
Rates are valid till 1:45pm today (06-Aug-18)
*Please note that the minimum subscription for bonds is
To invest in FGN Bonds or T-Bills, send an email to firstname.lastname@example.org or contact Afrinvest +234 809 778 3100