Inflows from FAAC and Bond Coupons Cause Interbank rates Drop to 3.00%


By Zedcrest Partners ltd




FGN Bonds

The Bond Market opened on a mixed note, with pockets of demand skewed on select maturities (2021s, 2027s & 2049s) following inflows of c.N65bn in FGN coupons credited today. Overall, yields on the benchmark curve expanded in anticipation of supply from the FGN Bond auction scheduled for later in the week. Yields closed an average of c.2bps higher at the close of trading.


With more coupon payments still expected this week (c.N67bn), we expect to see improved demand both at the primary market auction and in the secondary market.



Treasury Bills

The Treasury Bills market opened the week on a quiet note, as demand for OMO bills waned across the curve. The long-end (Jan OMO Bills) had significant axes but lack of market offers to match. Yields expanded by an average of c.2bps across the benchmark yield curve.

The NTB side continued to see lethargic activity, as retail-sized volumes were consummated on the long-end. Yields dropped by an average of c.13bps across the benchmark NTB curve.

We expect demand to pick-up across the T-bill curve as FAAC and OMO maturities positively impact system liquidity.


Money Market

Published System liquidity figures opened with c.436bn positive, as installments of FAAC money continued to flow in pushing rates downward by c.30bps. OBB/OVN rates closed at 2.58% and 3.50% respectively.


We expect rates to stay depressed in tomorrow’s session, as system liquidity is expected to remain buoyant.


FX Market

At the Interbank, the Naira/USD depreciated by 5k to close at N306.95/$, while the SMIS rates remained unchanged to start the week at and N358.51/$. At the I&E FX window, the closing rate for the Naira appreciated by 46k to close at N362.34/$.


At the parallel market segment, the cash rate appreciated by 30k to close at N360.00/$, while the transfer rates depreciated by N1 at and N364.50/$.



The NGERIA Sovereign tickers opened the trading week on a quiet note, as the U.S. observed Martin Luther King Jnr. day, reducing trading activity. Yields expanded by c.1bp across the benchmark sovereign curve.


The NGERIA Corps tickers traded on mixed sentiments, as yields on the FIDBAN 2022s and ACCESS 2021s dropping by 1bp apiece while the SEPLLN 2023s and ETINL 2024s expanded by 4bps and 3bps respectively.


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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 a piece of 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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