Investors Go For FGN Bonds Amidst Rising Liquidity

Investors Go For FGN Bonds Amidst Rising Liquidity

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Post Views: 170 Demand for sovereign Federal Government of Nigeria bond was heaviest Friday on the buy side, as both offshore and domestic institution...

Fixed Income: Investors Reprice Portfolios, After N454bn OMO Sale By CBN
Rates May Trend Lower, Amidst N550bn Liquidity In Interbank Market
Fixed Income: $210m CBN Intervention Keeps Interbank Rate Stable

Demand for sovereign Federal Government of Nigeria bond was heaviest Friday on the buy side, as both offshore and domestic institutional and retail investors seemingly took solace in that fixed income segment of the nation’s financial markets. This was buoyed also by the increased liquidity in the market, helped by the flight for safety as the equity market that has daily become more unpredictable and volatile.
The heavy demand for FGN bonds that was notable on the 2037 and 2O19 is expected to persist, although market players anticipate release of the Q2 FGN Bond calendar which will influence market behavior.

Treasury bills
The same bullish sentiment prevailed in the Treasury bills market, where demand was seen in medium maturities, as players took position for lost bids, following which yield moved south.
The Central Bank of Nigeria (CBN) is expected to offer a total of N58bn of a 91, 182 and 364-day bills at a Primary Market Auction (PMA) scheduled to hold on Wednesday, April 18, 2018.
The CBN is expected to offer N58.49 billion of the 91-day, N29.25 billion in 182-day, and N23.4 billion 364-day bills following which yields are expected to drop.

Interbank
The OBB and Overnight rates declined slightly to 2.33% and 2.92% with liquidity inflows from retail FX refunds to banks in the previous session. Rates are likely to remain stable, resulting also from system liquidity.

Money Market

Still in the euphoria of system liquidity, the CBN sold a total of N500 billion worth of bill as it intervened via OMO auction, aside the high system liquidity carried over from prior week which arose from matured OMO bills inflow of N476.21 billion.

By IDIALU ODEGUA JUDITH
judyodegua@yahoo.com

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