A Rather Drab Day in The Fixed Income Space

Proshare

Tuesday, December 22, 2020 / 8:06 AM / By Zedcrest Capital / Header Image Credit: Sofokleus


Proshare Nigeria Pvt. Ltd.


FGN Bonds

The FGN bond market opened the new week on a very drab note traded one-sided (all offers no bid). The 2034s and 2036s papers opened weaker than last week's closing as offers jumped another 20bps as we saw some quotes between 7.30%-7.40% for these maturities. We also saw a few order-driven requests for the SUKUK 2027s, mostly offered around 4.95%. Consequently, yields expanded across the curve by an average o c.20bps by business close today.

 

We expect this market weakness to persist in the interim with a few cherry-picking of selected bonds offered at attractive levels.

 

Benchmark FGN Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

 

16.39 27-Jan-22

2.80

1.70

0.31

 

12.75 27-Apr-23

3.50

1.90

0.51

 

14.20 14-Mar-24

3.90

2.10

0.40

 

13.53 23-Mar-25

5.00

3.00

0.00

 

12.50 22-Jan-26

5.60

5.00

0.11

 

16.29 17-Mar-27

5.95

5.20

0.15

 

13.98 23-Feb-28

6.40

5.60

0.60

 

14.55 26-Apr-29

6.50

5.60

0.50

 

12.15 18-Jul-34

7.55

7.30

0.05

 

12.50 27-Mar-35

7.55

7.30

0.05

 

12.40 18-Mar-36

7.55

7.35

0.05

 

16.2499 18-Apr-37

7.65

7.35

0.15

 

9.80 24-Jul-45

7.75

7.40

(0.25)

 

14.80 26-Apr-49

7.85

7.40

0.10

 

12.98 27-Mar-50

7.85

7.40

0.20

 

 

Treasury Bills

The T-bills market was tranquil for most of the trading session, although we saw a request for bids on mostly Jan-Mar, challenging to close. The latest OMO issue, 14/Dec, was offered at around 1.20% didn't get any bid to match.

The T-bills space will most likely coast for most of this week as most participants begin to wrap their books for year-end.

 

Benchmark OMO Bills

Description

Bid (%)

Offer (%)

Day Change (%)

NGOMOB 0 01/05/21

5.00

0.15

0.00

NGOMOB 0 02/02/21

5.00

0.20

0.00

NGOMOB 0 03/02/21

5.00

0.20

0.00

NGOMOB 0 05/11/21

6.00

0.30

0.00

NGOMOB 0 06/08/21

6.50

0.30

0.00

NGOMOB 0 08/10/21

6.50

0.35

0.00

NGOMOB 0 09/07/21

6.50

0.50

0.00

NGOMOB 0 10/19/21

7.00

0.50

0.00

 

 

Benchmark NTBills

Description

Bid (%)

Offer (%)

Day Change (%)

NIGTB 0 12/31/20

5.00

0.15

0.00

NIGTB 0 01/14/21

5.00

0.15

0.00

NIGTB 0 02/11/21

5.00

0.20

0.00

NIGTB 0 03/11/21

5.00

0.30

0.00

NIGTB 0 04/29/21

6.00

0.30

0.00

NIGTB 0 05/13/21

6.00

0.30

0.00

NIGTB 0 06/10/21

6.50

0.35

0.00

NIGTB 0 07/01/21

6.50

0.35

0.00

NIGTB 0 08/26/21

6.50

0.35

0.00

NIGTB 0 09/09/21

7.00

0.50

0.00

NIGTB 0 10/14/21

7.00

0.65

0.00

 

Money Markets

Interbank rated down by an average of c.300bps despite the sharp drop in Liquidity by 60.99% compared to Fridays' opening. This drop can be attributed to the less funding needs required in the market. The market opened the day cN334.41 positive with OBB and OVN closing the day at 1.00% and 2.00% levels, respectively.

We expect these low levels to persist for the week with no massive outflow set to move the market north.

Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

1.00

4.50

Overnight (O/N)

2.00

4.50

 

FX Market

The IEFX window stayed steady as the apex bank continues its daily intervention in that space, supplying FX within the mid N390/$1 levels. Generally, rates remained relatively stable in all the FX market segments, albeit low supply level for most of the trading session, causing no change in closing rates. Consequently, all other market segments remained unchanged, with the cash and transfer market closing the day at N475/$ and N490/$, respectively.

 

FX Market

Current (N/$)

Previous (N/$)

CBN Spot

379.00

379.00

CBN SMIS

380.69

380.69

I&E FX Window

394.00

394.00

Cash Market

475.00

475.00

Transfer Market

490.00

490.00

 

Eurobonds

The NIGERIA Sovereigns weakened today, although trading volumes stayed slim for the session. The bulk of the action was noted at the curve's belly, especially for the 2030s paper. Thus, yields expanded by an average of c.3bps across the sovereign curve. In the SSA space, the Angola papers pulled back some recent gains to underperform other SSA sovereign papers (Egypt and Ghana), as prices dropped -5cents D/D on the 2025s.

 

The SEPLLN 2022s paper was the most active of the NIGERIA Corps tickers, as the paper's yield strengthened by approx. 32bps.


Proshare Nigeria Pvt. Ltd.




Proshare Nigeria Pvt. Ltd.



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