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Fixed Income Market Report - 11 December 2020
#1
Secondary Market Ends Week On Mixed Note As Investors Maintain Their Risk-off Stances



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Market Commentary
System liquidity opened the day lower at ₦262.44 billion, while the Interbank call rate eased 50bps to close at 0.50%.

The secondary market closed the week on a mixed note, as investors maintained their risk-off stance, especially in the bonds market. Yields on benchmark bonds rose 35bps on average, driven by sell-side sentiment at the mid to long-ends of the market; notably, the yield on the 12.40% FGN-MAR-2036 climbed 234bps to 7.28%, while the yield on the 9.80% FGN-JUL-2045 and 14.80% FGN-APR-2049 rose 66bps and 84bps to 6.88% and 7.59% respectively. On the other hand, sentiment turned positive in the OMO space as yields eased 3bps on average, with some buy-side interest observed at the short-end of the market. Finally, in the NTB space, after a day of aggressive selling in the previous session, trading was markedly quieter with yields closing flat on the day.

Outlook

We expect the market to open the week on a muted note, with investors maintaining a risk-averse approach in the bonds and NTBs spaces. Meanwhile, we expect the improvement in oil prices to help support buy-side activity in the OMO space.

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Vetiva Research
Vetiva Capital Management Limited
Plot 266B, Kofo Abayomi Street
P. O. Box 73530 Victoria Island
Lagos, NIGERIA

Website: 
www.vetiva.com 
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