November 13, 2024/Coronation Research

Summary

• Market liquidity closed negative at N525.5bn on Friday (8 Nov ‘24). Call, overnight, and repo rates closed within the range of 7.10% – 32.48% as rates in the market broadened.
• The CBN issued Treasury bills totaling N513.43 billion (US$305.82 million) last week. Although the bid-to-offer ratio decreased to 1.30x from 1.31x at the last auction, the offer received a high level of demand, with total subscriptions reaching N669.93bn. On the 91, 182, and 364-day bills, stop rates increased from 17.00%, 17.50%, and 20.65% to 18.00%, 18.50%, and 23.00%, respectively.  A yield of 29.9% per annum was implied by the 1-year T-bill’s stop rate. 1.07 times the offered amount was the bid-to-cover.
• Investors who had lost their bids in the primary market drove average rates on Treasury bills to drop 26 basis points to 23.96% pa in the secondary market. The tenor buckets had varying yields. While yields at the midpoint of the curve and long-term bills decreased by 49 and 33 basis points to 24.85% and 24.81% respectively, average yields on short-term bills increased by 37 basis points to 21.62%.
• The CBN also offered N300.00bn (US$178.78.40m) In the OMO auction last week, for the 95, 179, and 361-day tenors. With a bid-to-offer ratio of 4.83x (compared with 3.03x at the last auction), the offer met the entire subscription of N1.45tn. Remarkably, this subscription only occurred for the 361-day tenor, while the stop rate decreased from 24.30% to 24.28% at the last auction.
• In the FGN bond market, average yields declined by 8bps to 19.42% annually. At the midpoint of the spectrum, average yields increased 3bps to 19.65%, while at the long end, average yields stayed at 17.54%. At the short end of the spectrum, average yields fell 22bps to 20.42%.  
• In the Eurobond market, the average yield moderated to 9.31% from 9.73% the previous week.