Bonds & Fixed Income | |
Bonds & Fixed Income | |
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Monday, March 16, 2020 /08:04 PM / By Zedcrest Capital / Header Image Credit: The Balance
Below are highlights of trading activities in the fixed income and forex market on March 16, 2020
FGN Bonds
Despite
the downward spiral of crude oil prices, the Bonds Market breathed a sigh of
relief, as bids improved across the bond curve, halting the sell-off noticed
over several days. The mid-end had the most axes (2027s, 2028s), as bond coupon
payments of c.N140bn gave some liquidity respite to local investors. Yields compressed by an average of c.50bps across the benchmark
bond curve.
We expect a quiet market in tomorrow's session,
as attention shifts The Nigerian Bureau of statistics' release of inflation
report for February.
Benchmark FGN Bonds |
||||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
|
14.50 15-Jul-21 |
8.69 |
6.94 |
(0.87) |
|
16.39 27-Jan-22 |
13.84 |
6.52 |
(0.01) |
|
12.75 27-Apr-23 |
10.80 |
9.99 |
(3.16) |
|
14.20 14-Mar-24 |
14.20 |
10.01 |
0.17 |
|
13.53 23-Mar-25 |
14.10 |
11.19 |
0.15 |
|
12.50 22-Jan-26 |
14.29 |
12.12 |
(0.28) |
|
16.29 17-Mar-27 |
14.06 |
13.06 |
(0.35) |
|
13.98 23-Feb-28 |
14.15 |
13.21 |
(0.26) |
|
12.15 18-Jul-34 |
14.50 |
13.02 |
(0.10) |
|
12.40 18-Mar-36 |
14.01 |
12.48 |
(0.86) |
|
16.2499 18-Apr-37 |
14.01 |
12.70 |
(0.68) |
|
14.80 26-Apr-49 |
14.01 |
12.76 |
(0.30) |
|
Treasury Bills
The Treasury Bills Market
opened the new trading week on a slightly bullish note, as bid slightly
improved from last week's close. Attention shifted to short- to mid-end of the
OMO curve (May and Sept), as supply from offshore investors was equally matched
by locals, who saw yields at that Duration to Maturity as attractive. Yields
dipped by an average of c.26bps across the benchmark OMO curve.
Similarly, The NTB side saw
some bullish sentiment, as we noticed pocket-sized demand on the mid-end of the
NTB curve, as banks looked to fill-in customer requests. Yields compressed by
an average of c.19bps across the benchmark NTB curve.
We expect the bullish
sentiment to persist in the interim, as market players look to reinvest
c.N300bn of maturing OMO maturities to stem the bearish tide seen in the last
couple of days.
Benchmark
OMO Bills |
|||
Description |
Bid (%) |
Offer
(%) |
Day
Change (%) |
NGOMO 19-Mar-20 |
18.50 |
13.50 |
0.00
|
NGOMO 2-Apr-20 |
18.00 |
16.75 |
(0.50) |
NGOMO 14-May-20 |
18.00 |
11.00 |
1.50 |
NGOMO 4-Jun-20 |
18.00 |
10.50 |
(0.50) |
NGOMO 2-Jul-20 |
18.00 |
10.50 |
(0.50) |
NGOMO 13-Aug-20 |
18.00 |
11.00 |
(0.50) |
NGOMO 3-Sep-20 |
18.00 |
17.00 |
(0.50) |
NGOMO 1-Oct-20 |
18.00 |
11.00 |
(0.50) |
NGOMO 3-Nov-20 |
18.00 |
11.00 |
(0.50) |
NGOMO 1-Dec-20 |
18.00 |
13.00 |
(0.50) |
NGOMO 5-Jan-21 |
17.95 |
15.00 |
(0.55) |
NGOMO 02-Feb-21 |
17.95 |
13.00 |
(0.05) |
Benchmark
NTBills |
|||
Description |
Bid (%) |
Offer
(%) |
Day
Change (%) |
NIGTB 2-Apr-20 |
2.70 |
1.00 |
(1.30) |
NIGTB 2-Jul-20 |
3.60 |
1.00 |
(0.90) |
NIGTB 1-Oct-20 |
5.00 |
1.00 |
0.00
|
NIGTB 12-Nov-20 |
5.50 |
1.00 |
0.25 |
NIGTB 14-Jan-21 |
6.00 |
3.00 |
0.30 |
NIGTB 11-Feb-21 |
6.50 |
2.00 |
0.50 |
Money Market
Interbank rates
spiked by c.800bps, as opening system liquidity of c.96.54bn positives, was
further stifled by funding provision for FX Wholesale Debit. OBB and OVN rates
closed higher to close at 17.40% and 18.10% respectively.
We expect rates
to firmly remain in the double-digit corridor, as system liquidity remains
tighten.
Money Market Rates |
||
|
Current (%) |
Previous (%) |
Open Buy Back
(OBB) |
17.40 |
9.17 |
Overnight (O/N) |
18.10 |
10.08 |
FX Market
At the Interbank, the
Naira/USD spot and SMIS rate remained unchanged at N306.95/$ and N358.51/$
respectively. At the I&E FX window, the Naira depreciated against the
dollar by N3.78 to close at N377.78/$.
At the parallel market,
cash rates depreciated by N3 to close at N376.00/$, while the transfer rate
dipped by N10 to close at N405.00/$.
FX Market |
||
Current (N/$) |
Previous ( N/$) |
|
CBN Spot |
306.95 |
306.95 |
CBN SMIS |
358.51 |
358.51 |
I&E FX
Window |
377.78 |
374.00 |
Cash Market |
376.00 |
373.00 |
Transfer Market |
405.00 |
395.00 |
Eurobond
The NGERIA Sovereign tickers traded on a bearish note, as offers strengthened across the
sovereign yield curve. With oil prices plunging to $32.87 per barrel (at the
time of this report), investors continued to trade oil price sentiment, despite
the U.S Federal Reserve announcing a cut in interest rates to zero over
the weekend. Yields spiked by an
average of c.84bps across the benchmark sovereign curve.
The NGERIA Corps tickers started the week on a bearish note, as yields weakened among most tracked papers. The ACCESS 2021s weakened by c.4.22bps, having the biggest D/D spike.
Related News
1.
Average Yield Dips Marginally to 3.9% Amidst Oil
Price Decline
2.
The Bears Reigned Unhinged in the Fixed Income
Market
3.
Interbank Rates Plunge as FX Retail Refund
Impacts Positively on System Liquidity
4.
Axxela Funding 1 Plc - Up to N10bn Series 1
Bonds Issuance Coming Soon
5.
Bearish Sentiment Persists in the Fixed Income
Space, as DMO Drops Rates at the T-Bills PMA
6. DMO Revises Bond Auction Calendar, Issues New
15-year (2035s) and 50-year Bond (2050s) Maturities
7. FCMB Announces Issuance of Commercial Paper of
up to N20bn by First City Monument Bank Limited
8.
NSE Lists FGN Savings Bond Issued in February
2020
9.
Average Yield Dips Marginally to 4.0% WoW Buoyed
by Improved System Liquidity
10.
Interbank Rates Drop Significantly as CRR Credit
of c.N200bn Hits Banks
11.
OMO Auction: CBN Sells N110.51bn at the 362-DTM
Only Dropping Rates by 1bp to 12.99%
12.
Sell-off in the
T-bills Market as Yields Continue to Retrace Across the OMO Curve