Home Money MARKETS BRIEF: DMO offers instruments worth N150 billion as treasury bonds average...

MARKETS BRIEF: DMO offers instruments worth N150 billion as treasury bonds average yield expands 1bp to 6.6%, Naira weakens 02%

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WED 20 JAN, 2021-theGBJournal- The overnight lending rate expanded by 50bps to 1.0%, in the absence of any significant inflows into the system.

Activities at the NTB secondary market were bearish, as average yield expanded by 9bps to 0.5%. Across the curve, average yield expanded at the mid (+1bp) and long (+19bps) segments, following sell-off of the 141DTM (+10bps) and 358DTM (+55bps) instruments, respectively. Conversely, average yield contracted slightly at the short (-1bp) end, as market participants bought up the 85DTM (-4bps) instrument. Similarly, average yield expanded by 2bps to 0.8% at the OMO secondary market.

Mixed sentiments ensued in the Treasury bonds secondary market as investors were focused on the activity at the primary market.

Thus, average yield expanded slightly by 1bp to 6.6%. At the PMA, the DMO offered instruments worth NGN150.00 billion to investors through three re-openings – 16.288% MAR 2027 (Bid-to-offer: 1.8x; Stop rate: 7.9800%), 12.50% MAR 2035 (Bid-to-offer: 2.1x; Stop rate: 8.7400%) and 9.80% JUL 2045 (Bid-to-offer: 0.8x; Stop rate: 8.9500%). Despite a total subscription of NGN238.27 billion, the DMO eventually allotted instruments worth NGN122.36 billion, resulting in a bid-cover ratio of 1.9x.

Meanwhile, the naira weakened by 0.2% to NGN394.17/USD at the I&E window but remained flat in the parallel market at NGN475.00/USD.-With Cordros Research

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