Home Money Markets Wrap: CBN offers N109.43 billion for sale with total subscription of...

Markets Wrap: CBN offers N109.43 billion for sale with total subscription of N574.68 billion at the PMA auction, Naira stays flat at N505/US$

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WED 14 JULY, 2021-theGBJournal- The naira appreciated by 0.1% to NGN411.22/USD at the I&E window but stayed flat at NGN505.00/USD in the parallel market.

The overnight lending rate contracted by 450bps to 14.5% in the absence of any significant funding pressures on the system.

Trading in the NTB secondary market was bearish, as the average yield expanded by 17bps to 7.0%. Across the benchmark curve, the average yield expanded the short (+6bps), mid (+38bps) and long (+17bps) segments due to sell-offs of the 92DTM (+34bps), 183DTM (+42bps) and 246 (+48bps) bills, respectively. At the PMA, the CBN offered NGN109.43 billion for sale with total subscription of NGN574.68 billion.

Accordingly, the CBN allotted NGN5.24 billion for the 91-day, NGN7.60 billion for the 182-day and NGN137.30 billion for the 364-day bills – at respective stop rates of 2.50% (previously 2.50%), 3.50% (previously 3.50%), and 8.67% (previously 9.15%). Elsewhere, the average yield at the OMO segment contracted by 23bps to 9.5%.

The Treasury bond secondary market was bearish, as the average yield expanded by 3bps to 11.7%. Across the benchmark curve, the average yield expanded at the short (+4bps), and long (+5bps) ends due to sell-offs of the JAN-2022 (+39bps) and MAR-2035 (+10bps) bonds, respectively. Conversely, the average yield pared at the mid (-2bps) segment due to demand for the FEB-2028 (-10bps) bond.

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