Fixed Income

Fixed Income: Investors Reprice Portfolios, After N454bn OMO Sale By CBN

Nigeria’s Treasury Bills market was significantly bearish on Thursday, as the rate at which yields rose increased across all tradable maturities, while market players repriced their respective portfolios. This followed the significant OMO sale of N454bn by the Central Bank of Nigeria (CBN).
Investors and traders in the fixed income market expect the market to remain significantly bearish at Friday’s session, due to the low system liquidity and expected outflows for retail FX funding by Banks.
On the Bond market, it was a mixed market following a slowdown in offshore profit taking and renewed buying interest from local investors, with the OMO Auction result influencing market behaviours as all subscriptions were filled by the apex bank.
In the Interbank market, the OBB and OVN rose significantly higher to 16.67% and 18.88% respectively. This came on the back of the significant OMO sale by CBN.
We expect rates to increase at Friday’s session, as banks look to fund for their retail FX bids, which is estimated to result in a net out of funds despite expected refunds from the previous retail FX sales.
The Interbank rate remained stable at its previous rate of N305.75/$, with the marked improvement in the CBN’s external reserves pool.

Related Articles

Back to top button