In the just concluded week, CBN sold treasury bills, via secondary markets, totalling N59.13 billion viz: 178-day bills worth N55.01 billion and 184-day bills worth N4.12 billion. These auctions were more than offset by matured secondary market securities worth N123.53billion.
Consequently, dealers at Cowry Asset Management Limited said Nigeria Interbank Offered Rate (NIBOR) fell for most of the tenor buckets amid financial system liquidity ease as maturities exceeded auctions NIBOR for the Overnight funds, 3 months and 6 months fell w-o-w to 13.85 percent (from 32.39 per cent) 21.21per cent (from 21.44 per cent) and 22.58per cent (from 22.61 per cent) respectively.
However, NIBOR for the 1-month tenor bucket rose w-o-w to 18.77 per cent (from 18.53 percent).
Elsewhere, Nigerian Interbank True Yield (NITTY) rose for most of the maturities amid profit taking activities – yield on the 1-month, 3-months and 6-months maturities rose to 17.04 per cent (from 11.31 percent), 19.14 percent (from 17.59 percent) and 18.90 percent (from 17.91 per cent) respectively. However, for the 12-months maturity, NITTY fell to 19.29 percent (from 19.36 percent).
Foreign Exchange
In the just concluded week, the Central Bank of Nigeria (CBN) injected USD195 million into various segments of the interbank foreign exchange market.
In the Wholesale Secondary Market Intervention Sales (SMIS),CBN auctioned USD100 million, the Small and Medium Enterprises (SMEs) window was boosted with USD50 million while the Invisibles segment received USD45 million.
Furthermore, as at 22 September 2017, Nigeria’s foreign reserve stood at USD32.16billion. Consequently, the interbank market (NIFEX) and I&E FX Windows exchange rates remained unchanged at N330/USD and N360.4/USD respectively.
In other segments, the naira appreciated week-on-week (w-o-w) at the Bureau De Change and Parallel market segments by 0.28 per cent and 0.54per cent to N362 and N365 respectively. In the forwards market, the spot contract appreciated w-o-w by 0.03per cent to N305.75/USD from N305.85/USD.
Similarly, the 3months, 6 months and 12months forwards contracts appreciated by 0.05per cent, 0.02per cent and 2.70per cent to N377.99/USD, N397.53 and N427.80/USD respectively.
This week, amid continued build-up in foreign reserves, rising global crude oil prices and CBN’s continued intervention in the various segments of the interbank foreign exchange market, dealers from Cowry assets management expect further stability of the Naira/USD exchange rate.
Bond Market
In the just concluded week, the Debt Management Office (DMO) auctioned FGN bonds worth N243.78 billion viz: the 5-year, 14.50per cent FGN JUL 2021 worth N35.26 billion, 10-year, 16.29 per cent FGN MAR 2027 worth N76.93 billion and the 20-year, 16.25per cent FGN APR 2037 worth N131.59billion. Furthermore, over the counter (OTC) bond prices appreciated further amid sustained bargain hunting activities.
Specifically, the 20-year, 10 per cent FGN JUL 2030 paper and the 10-year, 16.39 paper FGN JAN 2022 debt appreciated by N1.70 and N0.16
respectively, corresponding yields fell to 15.84per cent (from 16.26 per cent), 15.83 per cent (from 15.89 per cent). However, the 7-year, 16.00 per cent FGN JUN 2019 depreciated by N0.10 with yield rising to 16.01 per cent (from 15.95 per cent) while the 5-year, 14.50 per cent FGN JUL 2021 debt remained unchanged.
Elsewhere, FGN Eurobonds traded on the London Stock Exchange depreciated in value for all of the maturities amid sustained profit taking. Prices of the 10-year, 6.75 per cent JAN 28, 2021, the 5-year, 5.13 per cent JUL 12, 2018 and the 10-year, 6.38 per cent JUL 12, 2023 bonds fell by USD0.55 (yield rose to 4.72 per cent from 4.56 per cent), USD0.19 (yield rose to 3.57 per cent from 3.37 per cent) and USD1.05 (yield rose to 5.44 per cent from 5.24 per cent).
This week, dealers anticipate further bond price appreciation at the OTC market on the back of expected bargain hunting activities.