Weekly Economic And Financial Commentary – November 09, 2020

At last week’s OMO auction, compared to N90 billion offered by the CBN, subscription settled at N488.8 billion, with the 1-year stop rate declining further to 7.25% from 7.49% at the last auction. Average fixed income yields in the secondary market fell by 14bps to 1.98% following contraction at both ends of the curve. Average bond yields fell 25bps to 3.46% as investors were keen on the Jan-2021 (-28bps), Feb-2030 (-7bps), Feb-2038 (-5bps) and Nov-2027 (-5bps) bonds. Average NTB yields fell by 4bps to 0.50% as the 1-year (-47bps) and the 182-day (-7bps) bills both closed lower. Elsewhere, average FGN Eurobond yields contracted by 66bps to 6.48%, following buy sentiment across the curve with the most notable declines in the Jan-2021 (-84bps), and 60bps decline each for Feb-2027, Feb-2030 and Jan-2031. The recently released bond issuance calendar by DMO for the month of November and December 2020 showed a maximum offer of N100 billion 9an increase N30 billion offered in October) across two instruments in each of the auctions.