Bond Yields Rise Higher over Rumours of CBN Governor sack

    0
    612

    As CBN bans FX for textile import, plans single digit lending for sector***

    Bonds

    The FGN Bond Market traded on a mixed note, with yields trending markedly higher following slight sell off earlier in the session. We however observed renewed buying interests on the mid to long end of the curve later in the session, with the uptrend in yields consequently thinning out to c.3bps on the day.

    Market players are believed to have initially reacted to rumours of a removal (terminal leave) of the CBN Governor before the expiration of his tenure in June. Following reassurances by the apex bank of the contrary, we do not see scope for a further spike in yields as witnessed in today’s session.

    Treasury Bills

    The T-bills market remained slightly bearish as the CBN sustained its OMO interventions with a total sale of N28.58bn and N140.58bn on the 100 and 192-day bills offered at the auction. The 192-day bill remained oversubscribed just as the CBN cut the stop rate further by 3bps to 13.45% whilst stop rates were unchanged at 11.90% on 100-day bill offered. The Secondary market yields consequently trended higher by c.20bps on the day.

    We expect the market to remain scantily traded, as market players look forward to the possibility of a long tenor OMO offering on Thursday where we have c.N129bn in Maturing OMO bills.

    Money Market

    Rates in the money market declined further by c.4pct, as system liquidity remained moderately robust following inflows from Paris club refunds and I&E FX purchases by the CBN. The OBB and OVN rates consequently ended the session at 9.33% and 10.42% respectively.

    We expect rates to remain relatively stable, barring a significant OMO sale by the CBN.

    FX Market

    At the Interbank, the Naira/USD rates remained unchanged at N306.90/$ (Spot) and N356.92/$ (SMIS). The NAFEX rate in the I&E window appreciated further by 0.06% to N360.77/$ following continued inflows from FPIs into the market. At the parallel market, the cash and transfer rates remained unchanged at N358.00/$ and N364.50/$ respectively.

    Eurobonds

    The NGERIA Sovereigns remained bearish, with yields trending higher by c.9bps on the day.

    In the NGERIA Corps, we witnessed renewed demand for the DIAMBK 19s whilst Investors were slightly bearish on the ACCESS 21s Snr.

    SHARE
    Previous articleNaira Interest Rate Adjustment: T-Bill and OMO Auctions Produced Rates Much Lower Than Seen Earlier
    Next articleImo guber: Court to determine authentic AA candidate March 21
    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.

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here

    This site uses Akismet to reduce spam. Learn how your comment data is processed.