March 4, 2025/Coronation Research
Summary
- Last week, system liquidity rebounded, closing positive at N130.93bn (28th, February ’25), from -N722.57bn in the previous week. Therefore, the Open Repo Rate (OPR) and the Overnight Rate (O/N) decreased to 26.75% and 27.33% respectively. Looking ahead, we expect interbank rates to decline as liquidity improves from FAAC disbursements, Remita inflows, and OMO maturities, increasing funds available for lending and reducing borrowing costs.
- Average yields in the T-bills segment declined by 31bps to close at 19.89% w/w.
- In the secondary market for OMO, average yields declined by 244bps to 22.52% pa on the back of buying interest across the market segments particularly the mid and long end of the yield spectrum. The short-, mid- and long-end of the yield spectrum declined by 77bps, 369bps, and 243bps to 23.23%, 22.30% and 22.38% respectively.
- In the secondary market for FGN bonds, the average yields declined by 94bps across the benchmark curve to close at 18.53% w/w. At the FGN Bonds primary auction last week, the DMO offered instruments worth N350bn through the re-opening of the 19.30% FGN APR 2029 and 18.50% FGN FEB 2031. The total subscription settled at N1.63trn, however, the DMO allotted N910.38bn across both tenors with stop rates falling to 19.20% for the APR-29 bond and 19.33% for the FEB-31 bond.
- Trading activity in the Eurobond market increased, as average yields increased by 2bps to close at 8.951%.
For the full Coronation fixed income and exchange rate (CFEX) update, please click here
