Coronation Fixed Income and Exchange Rate Update

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October 30, 2024/Coronation Research

Summary

  • Market liquidity closed at negative N837.3bn on Friday (25 Oct ‘24). Call, overnight, and repo rates closed within the range of 6.63%—30.14% as rates moderated.
  • Last week, the average NTB yield increased by +2bps to close at 24.2%. During the week, the CBN conducted a Treasury bill auction, offering N374.7 billion in 91-, 182-, and 364-day bills. The 364-day tenor, which had a subscription of N460.4 billion—more than 1.3 times the offered amount—attracted a lot of interest. The yields on the 91-day and 182-day bills remained constant at 17.75% and 19.17%, respectively, while the yield on the 364-day bill increased by 123 basis points to 26.01%. The total allotments were N374.67 billion.
  • The average yield for OMO bills gained 18bps to close at 26.1% w/w.
  • In the secondary market for FGN bonds, the average yield increased marginally by +1bps to close at 19.3%. Last week, the monthly FGN bond auction was held. The April 29 and February 31 bonds were reopened by the Debt Management Office, offering a total of N180.0 billion (US$112.5 million), divided equally between the 5-year and 7-year bonds. Strong interest was seen at the auction, particularly for the February ‘31 bond, as total subscriptions reached N389.3 billion, or over 2.2 times the amount offered. With initial coupon rates of 19.30% and 18.50%, respectively, both bonds were reopened issues. The market is still demanding greater returns, therefore even with these base coupon rates, the auction’s marginal rates were significantly higher, at 20.75% and 21.74% respectively
  • In the Eurobond market, the average yield increased by +14bps to close at 9.6%

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

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