November 30, 2021/Coronation Report
Summary
- Opening market liquidity was reported at N227.6bn on Friday (26 Nov’ 21). Overnight and repo rates closed within a range of 14.5-15.7%. Last week, the average NTB yield declined by -25bps w/w to close at 4.9%. This can be attributed to improved market liquidity due to last week’s Federation Account Allocation Committee distribution (N672bn or USD1.62bn) and a moderation in the stop rate (by 10bps) of the 1-year NTB at last week’s primary market auction. At the primary market NTB auction, the CBN offered N118.7bn but allotted N209.9bn worth of NTBs to market participants, as it maintained the stop rates across two of the three tenors; 91-day: 2.5%, 182-day: 3.5%, 364-day: 5.8% (previously 5.9%). Meanwhile, the average yield for OMO bills rose by 2bps w/w to close at 5.5%.
- As for the secondary market for FGN bonds, the average yield rose by 5bps w/w to close at 11.4%.
- According to IHS Markit, the US Manufacturing PMI rose to 59.1 in Nov ’21 compared with 58.4 recorded in Oct ’21. Meanwhile, the Services PMI moderated to 57.0 in Oct ’21 compared with 58.7 recorded in the previous month. This is mainly due to increased domestic and international travel on the back of further easing in COVID-19 restrictions. Overall, the headline PMI reading moderated to 56.5 in Nov ’21 compared with 57.6 recorded in the previous month.
For the full Coronation fixed income and exchange rate (CFEX) update, please click here.
