Nigerian Financial Markets Report
Dear Esteemed Client:
In view of the financial system liquidity levels which opened today at ₦676.61bn, the Central Bank of Nigeria (CBN) conducted Open Market Operations (OMO) for foreign portfolio investors and DMBs with the apex bank offering ca ₦250.00bn across 82-day, 180-day and 355-day maturities, a counter-measure to curb system liquidity due to OMO maturities of ca ₦353.60bn. Although investors indicated much interest in the 355-day maturity with bid-to-cover ratio of 1.88x and stop rate of 13.30% (implied yield of 15.28%), the same stop rate for the longest maturity at the last auction, there were no subscriptions recorded for the 82-day and 180-day tenors. This further shows the appetite of eligible investors at this window for long term high yielding OMO bills after the CBN successfully segregated between the OMO and T-Bills markets.
In our view, the maturity profile of OMO in December 2019 is estimated at ca ₦2.28tn with estimated 70.0% of this amount eligible for participation; this may help stabilize rates in the near term. At the T-bills market however, an estimated ca ₦685.39bn maturities are expected for December with the only expected supply restricted to only bond PMA estimated at ₦150.00bn; this should further induce downward trend in rate at that segment of the market for the rest of the year. Read more…
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