
February 3, 2025/Coronation Research
Summary
- System liquidity closed positive for the second consecutive week at N721.34bn (31st January ’25). The Open Repo Rate (OPR) and Overnight Rate (O/N) closed higher at 29.14% and 29.57% respectively. We expect interbank rates to trend lower on the back of strong liquidity.
- In the secondary market for T-bills, trading activity was bullish as the average yields declined by 141bps to close at 23.43% w/w.
- The average yields for OMO bills in the secondary market declined by 48bps to close at 27.55% w/w. At the OMO primary auction, CBN offered N600.00bn, but strong investor demand, supported by high system liquidity, pushed the total subscription amount to N2.89trn. In the end, CBN allotted N1.00trn worth of 347-day and 361-day OMO bills to investors. The stop rates declined by 131bps and 119bps to 22.50% and 22.65% respectively from the last auction.
- Trading activity in the secondary market for FGN bonds was bullish. The average yield declined by 3bps to close at 20.69% w/w, driven by strong demand at the short end of the curve. Last week, the DMO held its monthly auction of FGN Bonds and offered instruments worth N450bn, but allotted N606.46bn through the reopening of the 19.30% FGN APR 2029 and 18.50% FGN FEB 2031. There was also a new issuance, an FGN JAN 2035. The bids for the 5-year, 7-year and 10-year bonds were allotted at the marginal rates of 21.79% (previously 21.14%), 22.50% (previously 22.00%) and 22.60% respectively.
- The Eurobond rallied last week as the average yields declined by 11bps to close at 9.32%.
For the full Coronation fixed income and exchange rate (CFEX) update, please click here