| Bonds & Fixed Income |    1065 VIEWS  |
| Bonds & Fixed Income | |
| 1065 VIEWS | |
 |
Sunday, October 27, 2019 / 06:02 PM / By Zedcrest Capital / Header Image Credit: This Is Money
Below
are the highlights of trading activities in the fixed income and forex market
on October 25, 2019
Bonds
The
Bond market maintained its bullish run to close the week, fueled by local
demand as investors reacted to the new CBN's OMO regulations. Yields closed the
session down by c.17bps on the average across the benchmark bond curve, with
the most active papers the 2029s and 2049s maturities.
We maintain a bullish outlook for bonds in the interim, as local investors look to bonds as alternative assets in light of restrictions on OMO securities by the CBN.
|
Benchmark FGN Bonds |
|||
|
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
|
14.50 15-Jul-21 |
13.65 |
13.15 |
(0.47) |
|
16.39 27-Jan-22 |
13.82 |
13.18 |
(0.29) |
|
12.75 27-Apr-23 |
13.86 |
13.18 |
(0.19) |
|
14.20 14-Mar-24 |
13.72 |
13.26 |
(0.15) |
|
13.53 23-Mar-25 |
14.01 |
13.52 |
(0.13) |
|
12.50 22-Jan-26 |
14.00 |
13.61 |
(0.19) |
|
16.29 17-Mar-27 |
14.06 |
13.85 |
(0.13) |
|
13.98 23-Feb-28 |
14.05 |
13.80 |
(0.11) |
|
12.15 18-Jul-34 |
14.19 |
13.86 |
(0.06) |
|
12.40 18-Mar-36 |
14.08 |
13.89 |
(0.12) |
|
16.2499 18-Apr-37 |
14.15 |
13.80 |
(0.10) |
|
14.80 26-Apr-49 |
14.47 |
14.23 |
(0.11) |
Source: Zedcrest Dealing Desk
Treasury
Bills
Trading
in the T-bills market was muted, with little volumes passed through. As market
participants digested the implications of the CBN's directive on OMO auctions,
we noted few trades executed on mostly NTBills issued at Primary Market
Auctions. Quoted spreads on widened reflecting the uncertainty in the markets.
We
expect rates to drop in the interim, as focus shifts to the next Primary
Auction scheduled for next week.
|
Benchmark Treasury Bills |
|||
|
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
|
14-Nov-19 |
12.50 |
10.50 |
0.40 |
|
5-Dec-19 |
12.50 |
11.60 |
0.40 |
|
2-Jan-20 |
12.50 |
11.00 |
0.00 |
|
6-Feb-20 |
12.50 |
11.00 |
0.30 |
|
19-Mar-20 |
12.20 |
10.00 |
0.10 |
|
2-Apr-20 |
12.50 |
11.00 |
0.20 |
|
14-May-20 |
12.00 |
10.80 |
(0.30) |
|
04-Jun-20 |
12.45 |
11.25 |
0.15 |
|
02-Jul-20 |
12.95 |
10.50 |
0.30 |
|
13-Aug-20 |
12.90 |
12.00 |
0.00 |
|
3-Sep-20 |
13.00 |
12.20 |
(0.20) |
|
1-Oct-20 |
13.00 |
11.00 |
(0.15) |
Source: Zedcrest Dealing Desk
Money
Market
Money market rates traded slightly higher from yesterday's close, as
banks made provision for Bond and Retail FX debits. OBB and OVN rates closed at
6.00% and 6.86% respectively, with market liquidity estimated to close the week
at c.N450bn.
We expect rates to trade in tandem with system liquidity in the coming
week, with funding pressures expected from Wholesale FX provisions to start the
week.
|
Money Market Rates |
||
|
|
Current (%) |
Previous (%) |
|
Open Buy Back (OBB) |
6.00 |
4.07 |
|
Overnight (O/N) |
6.86 |
4.79 |
Source: FMDQ, Zedcrest
FX
Market
At the interbank, the Naira/USD spot and SMIS rates remained unchanged
to close the week at N306.95/$ and N358.13/$ respectively. The I&E FX
window closing rate appreciated by 6k to close at N362.11$.
The Naira remained stable at the parallel markets, as both the cash and
transfer rates closed unchanged
at
N358.00/$ and N362.50/$ respectively.
|
FX Market |
||
|
|
Current (N/$) |
Previous ( N/$) |
|
CBN Spot |
306.95 |
306.95 |
|
CBN SMIS |
358.13 |
358.13 |
|
I&E FX Window |
362.11 |
362.17 |
|
Cash Market |
358.00 |
358.00 |
|
Transfer Market |
362.50 |
362.50 |
Source: CBN, FMDQ, REXEL BDC
Eurobonds
The NGERIA Sovereigns closed the week on a positive note, as
demand for the sovereign paper saw yields close lower by c.11bps on the average
across the curve. The highest gains were noted on the 2023 (+15bps), 2032
(+14bps) and 2047 (+16bps).
Demand interest for NGERIA Corps papers softened in today's session. Demand was noted on the SEPPLN 2023 paper which closed lower by 3bps, while the UBANL 2022s reversed some previous gains and closed the week c.8bps higher.
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