January 14, 2025/Coronation Update

Summary

• System liquidity was positive for the third consecutive week at N346.96bn (10 Jan ’25). Call, overnight and repo rates closed within a range of 7.63 – 27.86%. We expect interbank rates to tighten as outflows from upcoming swap maturities and CRR debits exceeds inflows from OMO maturities.
• At the primary auction last week, the CBN offered and allotted N515.0 the stop rates for 91-Day and 182-Day tenors remained steady at 18.00% and 18.50% respectively. Meanwhile, the stop rate for the 364-Day tenor moderated to 22.62% from 22.90% at the last auction, buoyed by strong demand, which was oversubscribed by 3.80x. In the secondary market, we observed a bullish sentiment for T-bills, as average yields declined by -24bps to close at 25.22% pa. Trading activity was dominated by significant demand in the 1-year T-bills, as investors redirected unmet demand from the primary market to the secondary market.
• Meanwhile, the market for OMO bills was bearish, the average yields for OMO bills increased by 65bps to 27.83% pa. At the OMO primary auction last week, the CBN offered and allotted N500bn worth of 350-day and 364-day OMO bills to market participants. The stop rates stood at 23.81% and 23.84%, translating to effective yields of 31.25% and 31.30% respectively.
• In the secondary market for FGN Bonds, the average yield increased by 8bps across the curve, to settle at 19.86% pa. Selloffs were observed across the yield curve. The average yield at the short and long end of the curve rose by 7bps to close at 20.98% and 17.81% respectively, while the mid-point of the curve added 10bps closing at 19.96%.
• In the Eurobond market, average yields advanced by 3bps to 9.52% from 9.49%.

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