Bonds & Fixed Income | |
Bonds & Fixed Income | |
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Thursday, December 21, 2017 7:00PM / @ZedcrestCapital
*** DMO
lists $300m diaspora bonds, $3bn Eurobonds on NSE, FMDQ***
Bonds
We witnessed further compression in
bond yields today, with demand especially focused on the 5-, 10– and 20-yr
maturities which declined by 4bps, 19bps and 11bps respectively. Slight demand
was also witnessed on the 2036 bond which declined by 1bp to 13.82%. Average
bond yields consequently compressed by 5bps to 13.84%, as bids on all
maturities fell below the 14% mark. We expect a slight decline in yields
tomorrow, due to position taking by some market players in anticipation of
increased demand opening next year.
Treasury Bills
The T-bills market remained bearish
in today’s session, following continued OMO interventions by the CBN. The CBN
sold a total of N355bn OMO bills in a bid to mop up excess system liquidity
coming from the OMO and PMA maturities today. Average T-bill yields consequently rose
by about 60bps as bids on most maturities rose to around 15% levels. We expect
this trend to persist in the near term due to the continued OMO interventions
by the CBN, and lack of significant client interest in T-bills at current
levels.
Money Market
The OBB and OVN rates declined
slightly to close today at 5.67% and 6.42%, as inflows from OMO and PMA T-bill maturities
(N150bn) today, coupled with inflows from FAAC and Paris club payments in
earlier sessions, helped to mitigate the effect of the significant OMO T-bill
sale of c.N355bn by the CBN in today’s session. System liquidity is
consequently estimated to close today at N65bn long, from a positive opening
figure of N270bn. We expect rates to be relatively stable tomorrow, barring a
further significant OMO sale by the CBN.
FX Market
The CBN Official spot rate remained
stable at its previous day rate of N306.15/$. Rates at the Investors and
exporters FX window depreciated by 0.11% to close at N361.31/$. Rates at the
parallel market however remained stable at N363.50/$.
For more
details email research@zedcrestcapital.com or
call the dealing desk via 01-6311667
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