Central Bank Shocks Markets, Excludes Non-Banks from OMO Auction


Zedcrest Partners Ltd




The FGN Bond market continued on a quiet note for the second consecutive trading session. We noticed slightly improved offers from market participants across most securities but very little volumes passed. Yields consequently remained unchanged on the average across the benchmark yield curve.


We maintain a cautious outlook for bonds in the interim in light of depressed oil prices.


Treasury Bills

The T-bills market opened the trade session on a mixed note, with sell-offs noted at the short- to mid-end of the NTB curve, while there was demand at the long-end of the curve due a delayed announcement of an OMO auction by the CBN. Following the announcement, market moderated as investors opted for better yields at the OMO auction.


At the OMO auction, the CBN bank sold a total of c.N120bn of the 364-day maturity, cutting down stop rate by 8bps o close at 13.40%. In an abrupt move, the Apex bank opted to restrict non-bank investors from bidding at the auction.


We expect a reactionary bullish market at the start of trading tomorrow, barring another OMO auction by CBN, as investors look to reinvest their matured bills.



Money Market

Money market rates dropped by an average of c.380bps as net flows from OMO maturities eased funding pressures for market participants. OBB and O/N rates closed at 8.05% and 9.50% respectively.


We expect money market rates to remain low barring any further mop up by the CBN.


FX Market

At the interbank, the Naira/USD spot rate remained stable at N307.00/$ while the SMIS rates remained stable at N358.13/$. At the I&E window, the closing rate for the Naira was relatively stable at N362.52/$.

The cash and transfer rates at the parallel markets also saw no change, closing at N357.80/$ and N362.50/$ respectively.


The NGERIA Sovereigns continued to trade bearish as oil prices remained pressured for a third consecutive day. Yields closed expanded by c.4bps on the average across the sovereign yield curve.


The NGERIA Corps were also pressured, with yields ticking higher across the tracked papers.

Contact us:

Email: research@zedcrestcapital.com


Whilst proper and reasonable care has been taken in the preparation and accuracy of the facts and figures presented in this report, no responsibility or liability is accepted by Zedcrest Capital or its employees for any error, omission or opinion expressed herein. This report is not an investment advice or a research recommendation and should not be regarded as such. The information provided herein is by no means intended to provide a sufficient basis on which to make an investment decision

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