September 28, 2021/Coronation Research

Summary

• Opening market liquidity was reported at N79.8bn on Friday (24 Sep ‘21). Overnight and repo rates closed within a range of 16.0-25.0%. The secondary market for NTBs was bearish due to sell-offs during the week. As a result, the average NTB yield rose by 4bps w/w to close at 5.6%. The average yield for OMO bills also rose by 8bps w/w to close at 6.4%.
   
• In the past week, the secondary market for FGN bonds was bullish due to increased demand as investors anticipated a lower yield environment following the recent USD4bn FGN Eurobond issuance, as well as due to some investors seeking to fill lost bids from a primary market bond auction held last Wednesday. These led to the average yield declining by 7bps to close at 11.2%.
   
• At the primary market bond auction on Wednesday, the DMO offered N150bn and allotted N227.1bn worth of instruments through re-openings of the 13.98% FGN Feb 2028 (unchanged at 11.6%), 12.4% FGN Mar 2036 (unchanged at 12.75%), and FGN Mar 2050 (13.0% previously 12.8%). Meanwhile, at the Eurobond market, the average yield of the sovereigns under our coverage increased by 28bps to 6.1% w/w.