October 4, 2021/Coronation Research
Summary
- Opening market liquidity was reported at N406.2bn on Thursday (30 Sep ‘21). Overnight and repo rates closed within a range of 15.0-25.0%. The secondary market for NTBs was bullish as a result of improved market liquidity and some investors seeking to fill lost bids from the primary market NTB auction held last Wednesday. As a result, the average NTB yield decreased by 32bps w/w to close at 5.3%. The average yield for OMO bills also declined by 11bps w/w to close at 6.3%.
- At the primary market NTB auction on Wednesday, the CBN offered N111.9bn and allotted N115.4bn worth of NTBs to market participants, as it maintained the stop rates across two out of the three tenors (91-day: 2.5%, 182-day: 3.5%, and 364-day: 7.5% previously 7.2%).
- Last week, the secondary market for FGN bonds was slightly bullish due to increased market liquidity on the back of inflows from bond coupon payments, thereby supporting demand levels. The average yield declined by 3bps to close at 11.2%.
- China’s official manufacturing Purchasing Manager’s Index (PMI) declined to 49.6 in September from 50.1 recorded in August according to data from China’s National Bureau of Statistics. China’s factory activity reduced in September due to electricity rationing, production bottlenecks and elevated input prices. However, the official non-manufacturing PMI in September was recorded at 53.2 compared with 47.5 in August, as the Covid-19 outbreak receded after rising during the summer months.
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