CBN OMO Auction Rates Remain Unchanged Despite Heavy Demand

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Thursday, September 10, 2020 / 11:05 PM / By Zedcrest Capital / Header Image Credit: Business AM Live


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FGN Bonds

The FGN Bonds continued to trade with bullish sentiments, albeit at a slower pace in today's trade session. Demand remained skewed to the belly of the curve, with the 2026s and 2027s papers coming out on top as the most sought-after papers and trading at mid 6% and 7% levels respectively. At the long-end we noted investors shift interests from the 2035s to pick up better yields offered on the 2034s which traded at 9.70% levels. Yields compressed by c.4bps on the average across the benchmark curve, consolidating the bullish trend seen so far this week.

We expect a quieter session to close out the week, with continued cherry-picking expected at the mid– to long–ends of the bond curve.

 

Benchmark FGN Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

 

16.39 27-Jan-22

5.00

3.45

0.00

 

12.75 27-Apr-23

5.65

3.80

0.00

 

14.20 14-Mar-24

5.65

4.10

0.00

 

13.53 23-Mar-25

6.15

5.00

0.00

 

12.50 22-Jan-26

7.00

6.35

(0.25)

 

16.29 17-Mar-27

8.05

7.65

(0.10)

 

13.98 23-Feb-28

8.15

7.80

(0.05)

 

14.55 26-Apr-29

8.75

8.25

(0.05)

 

12.15 18-Jul-34

9.90

9.58

0.00

 

12.40 18-Mar-36

10.00

9.65

0.00

 

16.2499 18-Apr-37

10.00

9.80

0.00

 

14.80 26-Apr-49

10.05

9.90

0.00

 

 

Treasury Bills

The OMO bills market has a muted session today, as focus shifted to the OMO auction floated by the CBN to manage maturities credited today. Rates remained unchanged at the OMO auction, as the CBN chose to put a reduced amount on offer (N70Bn) across the 3 tenors. Demand remained heavy on the long-dated paper which had a bid-to-cover ratio of 2.10X.

We expect a more active session to close the week as supply from the auction filters into the secondary markets.

 

AUCTION RESULT

 OMO - 10 Sept. 2020

Tenor

Rate (%)

Offer (₦'bn)

Sub (₦'bn)

Sale (₦'bn)

Previous Rate (%)

Changes

75 days

4.860

10.00

12.00

10.00

4.860

0.0000

180 days

7.680

10.00

35.30

10.00

7.680

0.0000

355 days

8.900

50.00

216.75

50.00

8.900

0.0000

 

Benchmark OMO Bills

Description

Bid (%)

Offer (%)

Day Change (%)

NGOMO 10/1/2020

3.00

0.01

0.00

NGOMO 11/03/2020

3.00

0.01

0.00

NGOMO 12/01/2020

4.00

0.01

0.00

NGOMO 01/05/2021

4.00

0.01

0.00

NGOMO 02/02/2021

4.00

0.01

0.00

NGOMO 03/02/21

4.00

0.01

0.00

NGOMO 05/11/21

5.00

0.01

0.00

NGOMO 06/08/21

5.00

0.01

0.00

NGOMO 08/10/21

5.00

0.01

0.00


Benchmark NTBills

Description

Bid (%)

Offer (%)

Day Change (%)

NIGTB 10/1/2020

2.00

0.01

0.00

NIGTB 11/12/2020

2.00

0.01

0.00

NIGTB 12/31/2020

3.00

0.01

0.00

NIGTB 01/14/2021

3.00

0.01

0.00

NIGTB 02/11/2021

3.00

0.01

0.00

NIGTB 04/29/2021

3.00

0.01

0.00

NIGTB 05/13/21

4.00

0.01

0.00

NIGTB 06/10/21

4.00

0.01

0.00

NIGTB 07/01/21

4.00

0.01

0.00

NIGTB 08/26/21

4.00

0.01

0.00

 

Money Markets

Interbank rates remained relatively stable, despite a 40.31% dip in system liquidity figures as Naira debits from FX interventions in the I&E FX Window hit local banks. Rates closed by c.14bps on the average, as OBB and OVN rates closed the day at 1.40% and 2.20% respectively.

We expect rates to close the week higher as banks make provisions for the Retail FX intervention.

 

Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

1.40

1.50

Overnight (O/N)

2.20

2.38



FX Market

The lack of supply again hit the FX markets today as rates weakened again in the parallel market. Cash and transfer rates lost an average of N11.00k to close higher at N457.00/$ and N460.00/$ respectively.

We expect the rates to remain stable to close the week, largely dependent on the amount the Apex bank sells at its bi-weekly FX Retail auction to quell some of the demand pressure.

 

FX Market

Current (N/$)

Previous ( N/$)

CBN Spot

379.00

379.00

CBN SMIS

380.69

380.69

I&E FX Window

386.17

386.00

Cash Market

457.00

440.00

Transfer Market

460.00

455.00

 

Eurobonds

Sub-Saharan African Sovereign bonds opened the session on a flat note, with not much activity seen on some of the popular names (ANGOLA, GHANA, and NIGERIA). The NIGERIA Sovereigns pulled away from its peers a bit, still riding off the previous day's rally in global oil prices. We noted strength across most of the papers on the sovereign curve, as yields compressed by c.4bps on the average.

It was another mute session for the NIGERIA Corporate papers, with some improved bids seen on the ACCESS 2021s and FIDBAN 2022s as the market reacted positively as the issuer of the latter announced plans to reduce its interest costs by issuing up to $131mio in local currency bonds to refinance its existing high-yield debt.


Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.


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