Banks Show Preference for Liquidity with Lower OMO Subscriptions


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The bond market traded on a relatively mixed note with some demand from local clients largely offset by some offshore profit taking. Trading in the two-way market was however relatively muted with yields compressing marginally by c.2bps on average. We expect yields to tick higher in the near term, as market players (traders) are relatively risk off on bonds at current levels.

Treasury Bills

The T-bills market traded on a slightly bearish note, with some sell on the shorter end of the curve, following a further OMO floatation by the CBN to mop up some of the excess liquidity in the system. Market players however continued to undersubscribe the auctions, with only a total of c.N175bn sold of the N450bn offered. We expect yields to be relatively stable as system liquidity remains buoyant.

Money Market

The OBB and OVN rates remained relatively stable at 3.33% and 4.42% respectively, as system liquidity remained buoyant at c.N450bn positive, despite the OMO auction sale today. We expect rates to inch slightly higher, due to anticipated funding for FX interventions by the CBN on Monday.

FX Market

The Interbank rate depreciated by 0.02% to N306.00/$ from its previous rate of N305.95/$, even as the CBN’s external reserves maintained a steady decretion, down to $47.62bn as at May 30. The I&E FX rate appreciated further by 0.29% to N360.85/$, with improved supply of liquidity via CBN interventions in the Market. Rates in the Cash market appreciated further by 10k to N361.70/$, while the transfer market rate remained stable at N366.00/$.


The NGERIA Sovereigns remained bearish with investors still selling off across the curve. We witnessed the heaviest losses on the 2032s and 2047s, which fell significantly by -1.60pt and –2.00pt respectively. Yields consequently rose by c.17bps on average.

The NGERIA Corps were also bearish across all traded tickers, with the heaviest losses seen on the Zenith 22s and SEPLLN 23s. Which lost –0.40pt and -0.35pt respectively.

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.