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The Nigeria Bond Watch - Review and Outlook @030214

Category: Bonds

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The Nigeria Bond Watch - Review and Outlook @030214

Monday, February 3, 2014 9:40 AM/ DLM Research

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The major highlights of the review week were the persistent issuance of OMO bills by the CBN and an observed interest decline from offshore investors as witnessed through the week.


In line with the prevailing monetary policy stance, consistent liquidity tightening was maintained during the week as a total of N280.0billion worth of OMO bills with tenors ranging between 121days and 143days were offered while a total of N360.31billion was sold at marginal rates ranging from 12.59% to 12.70%. Subscription level stood at N435.35billion. We observed a high level of subscription and sales during the OMO auction and indication of very high system liquidity. We however note that the reason for the liquidity tightening by the apex bank (CBN) could not be unconnected with OMO bills matured that took place during the week.


At the OTC market, there was a decline in interest in FGN bonds which resulted to a marginal increase in the yields of tradable bonds. This trend was sustained through the week as the market witnessed a sell-off consequent to reduced participation of offshore investors as necessitated by the speculations and outcome of the meeting of US FMOC that took place during the week. The persistent OMO bills auction that occurred during the week could not be left out as a contributory factor to the slowdown in secondary market activities. However, demand signals were seen in the latter part of the week, from domestic pension funds due to the recent increase in yields. In our view, the volatile trend as witnessed will persist in the next couple of days.


In the week ahead, we expect that treasury bills worth c.N189.22billion will be offered across maturities. We equally expect that OMO bills worth c.N140.0billion respectively will mature. Also expected is the CRR debit. Consequently, we anticipate tight market liquidity.
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While the website is checked for accuracy, we are not liable for any incorrect information included. The details of this publication should not be construed as an investment advice by the author/analyst or the publishers/Proshare. Proshare Limited, its employees and analysts accept no liability for any loss arising from the use of this information. All opinions on this page/site constitute the authors best estimate judgement as of this date and are subject to change without notice. Investors should see the content of this page as one of the factors to consider in making their investment decision. We recommend that you make enquiries based on your own circumstances and, if necessary, take professional advice before entering into transactions. This article is published with the consent of Dunn Loren Merrifield, the author(s) for circulation to the online investment community in accordance with the terms of usage. Further enquiries should be directed to the author whose e-mail is Dunn Loren Merrifield Limited []

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