February 22, 2022/Coronation Research
Summary
- Opening market liquidity was reported at N509.7bn on Friday (18 February ‘22). Overnight and repo rates closed within a range of 5.0-14.0%. Last week, the average NTB yield decreased by -6bps w/w to close at 4.2%. Meanwhile, the average yield for OMO bills decreased by 36bps w/w to close at 5.3%. At last week’s primary market OMO auction, the CBN allotted N60.0bn worth of OMO bills across all three tenors and the stop rates remained unchanged from the previous auction (103-day: 7.0%, 180-day: 8.5%, 348-day: 10.1%).
- As for the secondary market for FGN bonds, the average yield declined by -36bps w/w to close at 11.2%. At last week’s primary market FGN bond auction, the DMO offered N150bn but allotted N415.4bn worth of instruments through re-openings of the 12.5% FGN Jan 2026 (10.9%, previously 11.5%) and 13.0% FGN Jan 2042 (13.0% unchanged). Demand was considerably higher (subscription hit N557.7bn). This was largely due to improved system liquidity on the back of OMO maturities of N135.9bn and an fx retail refund last week.
- According to China’s National Bureau of Statistics, China’s headline inflation moderated to 0.9% y/y in January ‘22 compared with 1.5% y/y recorded in December ’21. Inflationary pressure eased in food prices (3.8% y/y) and housing (1.4% y/y) but persisted in transportation & communication (5.2% y/y) as well as education, culture and recreation (2.9% y/y).
For the full Coronation fixed income and exchange rate (CFEX) update, please click here.
