Nume Ekeghe
Nigeria’s cash market is anticipated to obtain N2.81 trillion in liquidity inflows this week as the Debt Management Office (DMO) gives N800 billion in Treasury payments right this moment, with the steadiness between maturing securities and contemporary authorities borrowing anticipated to form liquidity circumstances and yields.
The Financial Markets Dealers Association (FMDA), in its weekly market report stated the N2.813 trillion in inflows this week will probably be pushed largely by N2.408 trillion in Open Market Operations (OMO) maturities, alongside N263.58 billion in federal authorities bond coupons, N130.72 billion in Treasury payments maturities and N10.923 billion in company bond coupons.
The DMO is scheduled to supply N800 billion in Treasury payments right this moment, comprising N100 billion every in 91-day and 182-day devices and N600 billion in 364-day payments. Settlement is scheduled for October 29.
The FMDA report acknowledged: “Inflows are projected at N2.813trn this week, led once more by N2.408trn of OMO maturities, alongside N263.58bn of FGN Bond coupons, N130.72bn of T-bill maturities and N10.92bn of Corporate Bond coupons.
“The DMO returns to the primary T-bill market on 28 October with an N800bn offer (N100bn 91-day, N100bn 182-day, N600bn 364-day, settling 29 October), while its next FGN Bond auction isn’t due until 16 November, leaving the NTB sale as the main scheduled drain this week, alongside any further OMO absorption.”
The anticipated inflows come after liquidity progress within the monetary system moderated final week, as the affect of maturing securities and different inflows was partly offset by authorities borrowing and financial operations.
According to the report, “System liquidity rose a modest 10.39per cent w/w last week to N6.936trn from N6.283trn, a sharp deceleration from the prior week’s 69.39per cent surge, as strong inflows, N2.067trn of OMO maturities, N392.79bn of T-bill maturities, FGN Bond coupons and a confirmed N2.43trn FAAC disbursement (full transmission not yet certain), were largely offset by two absorption operations: the 19 October FGN Bond auction, which settled N2.024trn on 21 October, and the 22 October OMO auction, which sold N2.629trn across the 138-day (17.63per cent) and 180-day (17.14 per cent) tenors.”
Despite the slowdown in liquidity progress, Treasury payments yields declined final week, with the typical yield falling by 59 foundation factors to 17.64 per cent.
FMDA acknowledged: “T-bills: Treasury bill yields eased broadly last week, with the average down 59bps to 17.64 per cent, led by declines at the short end, the 1-month (-198bps) and 3-month (-96bps), even as the 6-month inched up 9bps; there was no primary market auction last week.”
The one-month Treasury payments yield fell by 198 foundation factors to 16.85 per cent, whereas the three-month yield declined by 96 foundation factors to 16.69 per cent. In distinction, the six-month yield rose by 9 foundation factors to 17.79 per cent.
Yields on the nine-month and 12-month devices declined by 9 and two foundation factors to 18.52 per cent and 18.35 per cent, respectively.
The yield actions present a backdrop for right this moment’s public sale, as buyers weigh the returns on newly issued payments in opposition to prevailing secondary-market charges and their liquidity positions.
In the bond market, common yields elevated by 10 foundation factors to 16.53 per cent, reflecting combined actions throughout maturities.
The report acknowledged: “FGN bonds: FGN bond yields were broadly steady last week, up just 10bps on average to 16.53per cent, as a sharp rally at the 2-year (-100bps) offset selloffs at the long end, led by the 30-year (+113bps) and 15-year (+68bps).”
The two-year bond yield declined by 100 foundation factors to 16.50 per cent, whereas the 15-year and 30-year yields rose by 68 and 113 foundation factors to fifteen.18 per cent and 15.73 per cent, respectively.
