April 20, 2022/Coronation Research
Summary
- Opening market liquidity was reported at N272.3bn on Thursday (14 April ‘22). Overnight and repo rates closed within a range of 7- 13%. On a w/w basis, the average NTB yield remained unchanged at 3.3%. At the primary market NTB auction held last week, the CBN offered N141.3bn but allotted N159bn worth of NTBs to market participants. The stop rate rose across two of the three tenors; 91-day: 1.74% (previously 1.75%), 182-day: 3.0%, 364-day: 4.6% (previously 4.5%). This was largely due to improved system liquidity on the back of OMO maturities of N50bn and NTB maturities of N132.1bn. Meanwhile, the average yield for OMO bills increased by 11bps w/w to close at 3.7%.
- As for the secondary market for FGN bonds, the average yield increased by 7bps w/w to close at 11.1%.
- Based on the IMF’s latest World Economic Outlook (WEO), the global forecast for this year has been revised downwards from 4.4% y/y to 3.6% y/y. The IMF expects a global GDP growth of 3.6% y/y (previously 3.8% y/y) in 2023. The downward revision is largely attributed to the ongoing Russia-Ukraine crisis, sanctions on Russia and the spillover effect across economies. On another note, based on data from China’s Bureau of Statistics, the economy grew by 4.8% y/y in Q1 ’22 compared with 18.3% y/y recorded in Q1’ 21. The slowdown reflects the impact of COVID outbreaks and the effect from the Russian-Ukraine crisis on consumption, real estate and exports.
For the full Coronation fixed income and exchange rate (CFEX) update, please click here.
