Bond yields rise above 14% with slight profit taking on the 20-yr


Thursday, December 28, 2017 6:30PM / @ZedcrestCapital 

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 Proshare Nigeria Pvt. Ltd.


The bond market remained slightly bearish today due to lack of demand for bonds as most traders were looking to stay square on their positions. Average bond yields consequently rose by 13bps to 14.07%, with mixed trading sentiments witnessed on the 5– and 10-yr bonds, but with slight profit taking on the 20-yr. We expect tomorrow to be relatively quiet been the last day of the year, we may however see slight buys by some market players looking to take some early positions into the New Year.

 Proshare Nigeria Pvt. Ltd.

Treasury Bills

The T-bills market remained flat in today’s session despite the huge cash inflows into the system via OMO T-bill maturities and retail FX refunds by the CBN. The OMO auction by the CBN was also undersubscribed, with a total of N129bn of the 91– day (N8bn) and 294-day (N121bn) bills sold at 12.85% and 14.65% respectively. We expect a quiet trading session tomorrow, even as the CBN is expected to conduct its last OMO auction for the year.

 Proshare Nigeria Pvt. Ltd.

Money Market

The OBB and OVN rates declined to 4.25% and 4.92%, on the backdrop of the inflows from OMO maturities and retail FX refunds. System liquidity is consequently estimated to close today at N445bn long, from a positive opening figure of N206bn. We expect rates to close slightly higher tomorrow, due to expected outflows for OMO T-bill and retail FX sales by the CBN.

  Proshare Nigeria Pvt. Ltd.

FX Market

The CBN Official spot rate appreciated by 0.02% to close at N306.05/$ from its previous day rate of N306.10/$. Rates at the Investors and exporters FX window also appreciated by 0.03% to close at N360.60/$. Rates at the parallel market however remained stable at N363.50/$.

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