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Fixed Income Market Update: 11th August, 2021



Naira appreciated at the  I&E FX market  by 0.02 % as the dollar was quoted at ₦411.40 as against the last close of ₦411.50. Most players maintained bids between ₦400.00 and ₦412.50 per dollar.


Dollar Falls After Data Shows U.S. Consumer Prices Eased In July

The naira yesterday lost N5 to close at N515/$1 at the parallel market.The local currency had also lost N5 to close at N510/$1 on Tuesday as dollar scarcity and volatility continued to hold sway in the market.The naira had also exchanged at N505/$1 last weekend, after massive rally that allowed it gain N20/$1 within the week.However, exchange rate at the Investors’ and Exporters (I&E) Forex Window, remained stable at N410.12/$1.

The I&E window has come to represent the official market rate and allows foreign investors to bring foreign currency to the country at a rate of their choice, provided they are able to find buyers. The pressure against the naira at the parallel market followed Central Bank of Nigeria’s decision to stop dollar sales to bureaux de change (BDC) operators.

Investigations showed that pressure on the naira intensified after manufacturers and foreign exchange end-users scrambled for scarce greenback to meet their business and personal needs.  Forex users preference for BDCs over banks have been linked to tedious documentation process and various levels of approvals required to purchase dollars from banks, which are usually not met at short notice. Findings showed that request for dollar purchases at commercial banks’ branches are usually approved at the headquarters before noon.




There treasury Bills secondary market was secondary market was relatively quiet , activities was seen majorly on the mid maturities. 25-Nov-21 maturity bill was the most active  with a dip of 9bps.The  average yield across the curve decreasing by 2 bps to close at 5.52 % .Average yields across medium-term and long-term maturities fell by 6 bps and 2 bps, respectively.

Investment in treasury bills

The CBN is scheduled to hold its scheduled Primary Market Auction to roll over treasury bills  maturities worth ₦51.50 billion across 91 day (₦8.44 billion), 182 day (₦16.06 billion), and 364 day (₦27.00 billion) tenors.

Outlook on Treasury bills Primary market auction Yields.

We  expect to see some moderation for  364 day bills  riding on the back of due investor preference for the instrument .We also expect to see some  pressure on debt service charge arising from the need to finance the deficit in the NGN982.84bn supplementary budget approved by the National Assembly .

At the last PMA, average stop rate remained unchanged at 2.5% for 91 and  3.5% for 182 from the last auction driven while 364 days declined to 8.20% from 8.67% . The direction of rates continues to be influenced by strong investor subscription (particularly on the 364-day instrument), and the need to minimise the Federal Government cost of borrowing .

For the OMO bills market, the average yield across the curve remained unchanged at 7.71 percent. Average yields across short-term, medium-term, and long-term maturities closed flat at 7.34 percent, 7.60 percent, and 8.43 percent, respectively.


The Overnight rate increased by 4.00 percent to close at 17.50 percent as against the last close of 13.50 percent, and the Open Buy Back rate also increased by 4.00 percent to close at 17.00 percent compared to 13.00 percent on the previous day.

Despite OMO repayment of ₦78.71 billion, the money market rates are likely to trend in double digits.

The DMO released its FGN Bonds offer circular for August 2021 Primary Market Auction, indicating plans to offer FGN bond worth ₦150 billion through re-opening of 10-year (₦50 billion), 20-year (₦50 billion), and 30-year (₦50 billion) tenors. The bond auction is scheduled on August 18, with settlement on August 20, 2021

FGN bonds secondary market

FGN bonds secondary market saw a mixed market session as the average bond yield depreciated to close at 8.90 % from 9.00 % on the previous day.The 24-JUL-2045 maturity bond was the most active with a decline in yield of 38 basis points.


Fixed Income, FX Markets Sustains Momentum Recording N15.31trn, $10.12bn Turnover In One Month.


The Investors’ interest in the fixed income and currencies markets has continue to soar as both markets recorded significant increase in turnover in June 2021, a report by FMDQ OTC limited has revealed.Analysis of the report revealed that fixed income markets recorded a turnover of N15.31 trillion for the month ended June 30, 2021, representing a month-on-month (MoM1) increase of 49.51 per cent to N5.07trillion and a year-on-year (YoY2) decrease of 7.04 per cent (N1.16trn).

The report revealed that foreign exchange (FX) and money market transactions were the highest contributors to the fixed income markets turnover in June 2021, jointly accounting for 64.18 per cent of the total fixed income markets turnover.Similarly, the FX market recorded a turnover of $10.12bn (N4.16trillion), in June 2021, representing a MoM increase of 38.44 per cent ($2.81billion) from the turnover recorded in May 2021 ($7.31billion).


  Nigeria’s Digital Currency To Be Designated ‘Critical National Infrastructure’

According to a report, the Central Bank of Nigeria (CBN) is planning to have its proposed digital currency designated “critical national infrastructure” in order to protect it from operational and cyber-security risks. In addition, the CBN will also apply regulatory and compliance mechanisms to prevent what it calls “disruptive competition for electronic money.”

Cost Versus Benefit  ,As a Thisdaylive report explains, the digital currency which will be known as the e-naira will initially co-exist with traditional payment systems. CBN hopes that this strategy will help it “address interoperability risks that might be associated with the implementation.”With respect to the costs and risks involved.

CBN Sets N100,000 As Application Fee For Credit Guarantee Companies –

The Central Bank of Nigeria (CBN) has issued guidelines for licensing, regulation and supervision of credit guarantee companies (CGCs).A CGC is an institution licensed by the CBN with the primary objective of providing guarantees to banks and other lending financial institutions against the risk of default by obligors.Ibrahim Tukur, CBN’s director of the financial policy and regulation department, made this known in a recent circular.Tukur explained that it (guidelines) seeks to ultimately reduce credit risk, stimulate lower interest rates on loans and complement other initiatives of regulatory authorities aimed at stimulating lending to MSMEs


CBN said the guidelines would curb the difficulties micro, small and medium enterprises (MSMEs) face in accessing credit from the formal sector.Tukur explained that it (guidelines) seeks to ultimately reduce credit risk, stimulate lower interest rates on loans and complement other initiatives of regulatory authorities aimed at stimulating lending to MSMEs.


Twitter Has Agreed To Set Up Nigeria Office In 2022

The Federal Government has said the social networking site, Twitter, has agreed to set of Nigerian office in 2022. It added that the over two-month ban on the social networking site will soon be lifted as it had reached an agreement with Twitter in most areas of misunderstanding.The Minister of Information and Culture, Lai Mohammed, disclosed this on Wednesday while answering questions from State House correspondents after a meeting of the Federal Executive Council presided over by Vice President Yemiat the Presidential Villa in Abuja.

Recall that on June 5, 2021, the Federal Government banned Twitter after it deleted tweets made by the President, Major General Muhammadu Buhari (retd.), warning the Indigenous People of Biafra that they “will be treated in the language they understand.”


DISCLAIMER: This publication is strictly for information purposes only for Zock capital and invest  LLC  and its employees take no responsibility or liability as to the accuracy and completeness of the information.
For further ./enquiries/information on this publication, please contact Research and Economic Intelligence .

Analyst: Judith Idialu: Zock capital and Investment LLC,
0805 598 0595

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