Bond Bulls Resumed Demand For FGN Bonds After The Previous Day's Pull-Back

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Friday, June 26, 2020 / 5:52 AM / By Zedcrest Capital / Header Image Credit: AdvisorHub


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FGN Bonds

The bond market kicked off on slow note with activities dragging for most of the trading session. The bulls showed love for short-dated bonds, particularly the 2023s and 2024s with trades settling around 6.10% and 6.30% for both papers respectively. By mid-day, interests shifted to mid-dated papers, particularly the 2027s paper offering the highest yield at the belly of the curve. Yields compressed by an average of c.37bps across the benchmark curve.

We expect the market to close the week on this low toned note, with local investors picking up a few bonds of interest.

 

Benchmark FGN Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

 

14.50 15-Jul-21

5.04

3.30

(0.25)

 

16.39 27-Jan-22

5.00

4.00

(0.68)

 

12.75 27-Apr-23

6.98

6.02

(0.03)

 

14.20 14-Mar-24

7.04

6.10

(2.58)

 

13.53 23-Mar-25

7.42

6.98

(0.68)

 

12.50 22-Jan-26

8.69

7.88

(0.43)

 

16.29 17-Mar-27

9.73

9.02

(0.05)

 

13.98 23-Feb-28

9.82

8.86

(0.08)

 

14.55 26-Apr-29

9.89

9.04

0.00

 

12.15 18-Jul-34

10.62

10.18

0.00

 

12.40 18-Mar-36

10.61

10.20

0.00

 

16.2499 18-Apr-37

10.68

10.12

0.00

 

14.80 26-Apr-49

11.50

11.28

0.00

 

 

Treasury Bills

The OMO space started off the day largely offered with little bids to trigger interesting activities in the market. Some activity picked up as the session wore on, notably on the 25 May 2021 paper which ended trading in the 5.70%-5.80% range. We also saw some interest in short-dated bills, which were offered around 4.00% levels. Subsequently, yields compressed by c.16bps across the OMO curve.

The market is expected to remain calm, with some order-driven requests on selected papers expected.

 

Benchmark OMO Bills

Description

Bid (%)

Offer (%)

Day Change (%)

NGOMO 7/2/2020

5.00

2.50

0.00

NGOMO 8/13/2020

3.50

2.50

(1.50)

NGOMO 9/3/2020

5.00

4.00

(0.25)

NGOMO 10/1/2020

5.50

4.25

0.00

NGOMO 11/03/2020

5.60

3.50

0.10

NGOMO 12/01/2020

6.00

4.50

0.00

NGOMO 01/05/2021

6.50

5.00

0.25

NGOMO 02/02/2021

6.50

4.50

0.00

NGOMO 03/02/21

6.50

4.80

0.00

 

Benchmark NTBills

Description

Bid (%)

Offer (%)

Day Change (%)

NIGTB 2-Jul-20

3.00

0.50

0.00

NIGTB 1-Oct-20

3.00

0.50

0.75

NIGTB 12-Nov-20

3.50

0.50

1.00

NIGTB 14-Jan-21

4.00

0.50

0.75

NIGTB 11-Feb-21

4.00

0.50

0.30

 


Money Markets

Rates in the Interbank Market increased by an average of c.116bps as the market continues to feel the squeeze from no expected inflow to support the system.  OBB and OVN rates closed at 15.83% and 16.92% respectively, as system liquidity is estimated to close at c. N6.32bn positive.

System liquidity is not expected to ease tomorrow, however rates will most likely stay unchanged since the market does not expect major funding aside from the regular day-to-day running of business operations.


Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

15.83

14.67

Overnight (O/N)

16.92

15.75

 

FX Market

The Nigerian IEFX window was fairly stable level as rate changed slightly compared to yesterday’s although the volumes traded at this level were very scanty; FX Liquidity continues to dwindle with offers fading.

At the parallel market, the Naira lost approximately N2.00K in both cash and transfer window to close at N457.00/$ and N459.00/$ respectively while the CBN Spot, and SMIS rates remained static at N361.00/$ and 380.69/$ respectively.

 

FX Market

Current (N/$)

Previous ( N/$)

CBN Spot

361.00

361.00

CBN SMIS

380.69

380.69

'I&E FX Window

387.27

387.17

Cash Market

457.00

455.00

Transfer Market

459.00

457.00

 

Eurobonds

The NGERIA Sovereign tickers weakened in today's session as the market saw a bit of profit-taking across the benchmark curve, mostly on the mid- and long-tenured papers. Yields expanded by an average c.5bps across the sovereign papers. Also in the SSA space, the Angola papers continued to rally with very few offers seen. The Angola 2025s, the most active paper, rallied again to close around 12.20%.

The NGERIA Corps saw some interest at the early trading hours, although this was short-lived. Yields on the ZENITH 22s and FIDBAN 22s dropped by c.12bps and c.26bps respectively D/D.


Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.


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