June 3, 2022/Coronation Research

Summary

• Opening market liquidity was reported at N240.9bn on Friday (27 May ‘22). Overnight and repo rates closed within a range of 12 – 15%. The average NTB yield increased by +14bps w/w to close at 3.8%. At the primary market NTB auction held last week, the CBN offered N153.0bn but allotted N173.5bn worth of NTBs to market participants. The stop rates rose across all three tenors; 91-day: 2.50% (previously 1.74%), 182-day: 3.9% (previously 3.0%), 364-day: 6.5% (previously 4.8%). This was partly due to pressure on market liquidity on the back of CBN’s OMO and FX auctions. Meanwhile, the average yield for OMO bills increased by 40bps w/w to close at 4.4%. At the OMO auction, the CBN offered and allotted N20bn worth of OMO bills to participants and maintained stop rates across the three tenors.
• As for the secondary market for FGN bonds, the average yield increased by +8bps w/w to close at 11.2%.
• At the Eurobond market, yields dipped for all sovereigns under our coverage. For the sovereigns, the average yield decreased by -190bps w/w to 10.7%.  
• The European Union (EU) has agreed on a partial ban on Russian oil imports by end-2022. The ban covers c.90% of oil imports from Russia. Russian oil delivered by tankers would be banned, while an exemption will be made for the southern segment of the Druzhba pipeline, which goes to Hungary, Slovakia, and the Czech republic. This segment of the pipeline accounts for 10% of EU oil imports from Russia. Brent crude increased by 7.3% w/w from USD113.4/b to USD121.7/b as at 30 May ’22.

For the full Coronation fixed income and exchange rate (CFEX) update, please click here.