Weekly Market Review

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Weekly Market Review

Money Market
The Interbank market closed with N360 billion on Thursday with rates dropping by an average of 120 basis points (bps). The net Open Market Operation (OMO) flows of N162.23 billion positively impacted market liquidity, causing Open Buy Back (OBB) and Overnight (OVN) rates closing at 6.71 per cent and 7.79 per cent respectively.
FX Market
At the interbank, the Naira/USD spot and Secondary Market Intervention (SMIS) rates remained unchanged at N306.90/$ and N358.51/$ respectively. The I&E FX window further depreciated by 27k to close the day at N362.79/$.
The Naira remained stable at the parallel markets, as both the cash and transfer rates closed unchanged at N358.00/$ and N362.50/$ respectively, according to dealers from Zedcrest Capital Limited.

 Treasury Bills
Activity in the Treasury Bills Market picked up in Thursday’s session, with bullish sentiments seen towards the short- and mid-dated Open Market Operation (OMO) maturities.
Dealers from Zedcrest Capital said they noted sizeable interest by Foreign Portfolio Investors on short-dated maturities, as they continue to switch from Nigeria Treasury Bills (NTBs) to high-yielding OMO maturities.
The newly issued 1-year NTB at Wednesday’s Primary Market Auction (November 12, 2020) wasn’t left out, as market players who missed out at the auction swooped-in, causing yields to plunge in the secondary market by an average of 125bps from the auction stop rate (10.00 per cent).

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Yields consequently dropped by an average of about 26bps across the benchmark NTB/OMO curve.
At the OMO auction, the apex bank sold a total of N243.77 billion across the three tenors on offer with stop rates of the 173 and 362 days remaining unchanged, while the 82Day closed at 11.50 per cent (from a NO SALE at the previous auction).
Dealers expect bullish sentiments to persist, as Foreign Investors continue switching from NTBs into OMO Bills to take advantage of the spread in available yields. “We also expect the newly issued NTBs to see more demand by local investors as the scramble continues for favorable rates,” the dealers said.

FGN Bonds
The Federal Government of Nigeria (FGN) Bonds market continued to rally across the benchmark curve for a second consecutive session, as investors looked to reinvest funds received from maturities. Yields dropped by an average of  16 basis points (bps ) across the benchmark yield curve, with the most gains noted on the 2021s (+41bps), 2026s (+30bps) and 2034s (+34bps).
According to dealers, the 2049s was the most traded bond in Thursday’s session, as investors showed a preference for yield over duration, leading to a 25bps drop to close at 13.35 per cent.

Eurobonds
The Nigeria Sovereigns opened the day’s trading session on a bullish note, as demand remained at the short- to mid-ends of the curve. The 2025s recorded the largest move, with yields dropping by 95bps from Wednesday’s session. Average yields dropped by 33bps across the sovereign yield curve. The Nigeria Corps remained quiet, with little trading activity witnessed on the tracked papers.

Nigerian Tribune

Weekly Market Review
Tribune Online