Money market rates and Federal government bond yield inched up across all tenors at the close of trading yesterday, reflecting opportunities offered by the money and debt instrument market over the equities market which declined on Tuesday.
With the exception of the 6-month Nigerian Interbank Order Rate (NIBOR) rate which contracted by 26bps to close at 21.97 percent, money market rates expanded across tenors on Tuesday driven by limited system liquidity.
The 1-month and the 3-month NIBOR rates expanded by 154 bps and 91bps to berth at 16.79 per cent and 18.51 per cent respectively.
Also, following the publication of early January 2017 and the bond offer circular Tuesday in which the Debt Management Office (DMO) plans to raise N130billion as against N90billio in December, yields on FGN bonds inched up across all tenors.
Analysts maintained that the trend is likely to persist until the auction day as investors are likely to demand higher yields.
At the close of trade yesterday, yields on the 5yr, 7yr and 10 yr benchmark bonds inched up by 8bps, 7bps and 7bps to settle at 16.18 per cent, 16.11 per cent and 16.66 per cent respectively.
We expect activity in the subsequent session to be influenced by liquidity level which contracted by 26bps to settle at 21.97%, money market rates expanded across tenors on account of limited system liquidity.
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