Anxiety as Nigeria’s bond market closes negatively

The bond market closed on a flat note on Friday, as slight sell at the opening of the market were offset by some investors later in the day. Market activity remained focused at the end of the curve (2027 s- 2037s), with slight buys however on the 2019 bond.
Average bond yields consequently closed flat at 14.89 per cent, as the Treasury-Bills market also traded negatively too. Market players have continued to play on the short end of the curve, while they reinvested most of their Open market Operations maturity inflows at the OMO auction by the CBN.
Analysis of both the OMO and the T-bills market trading over the weekend showed that the apex bank sold a total of N130billion OMO T-bills on Friday, consequently mopping up inflows of N133billion from maturing OMO bills.
“We expect the market to be slightly bearish next trading session, as banks will try to create liquidity for their retail Secondary Market Intervention Sales provisioning,” a trader said.
The Open buy-back and overnight rates fell to 6.17 per cent and 6.67 per cent on Friday, as system liquidity remained positive despite the OMO T-bills sales by the CBN.
“System liquidity is estimated to close today at N166 billion, away from a positive opening figure of N155 billion as published by the CBN,” another trader pointed out.
According to data obtained by The Point, the CBN’s official spot rate appreciated slightly by 0.02 per cent to N305.95/$ from its previous day rate of N306.00/$. Its external reserves are also recorded to have improved by 2.04 per cent to $34.31billion as at November 14, 2017.
Rates at the Investors and Exporters FX window appreciated to N359.56/$ from N360.42/$ in the previous session. The parallel market, however, remained stable at its previous day rate of N362.50/$.