Bonds & Fixed Income | |
Bonds & Fixed Income | |
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PROSHARE | |
PROSHARE |
Tuesday, March 10, 2020 / 7:49 PM / Zedcrest Capital / Header Image Credit: The Irish Times
FGN
Bonds
Yields recovered slightly in the Bonds Market, buoyed
by the revised Bond auction calendar from the Debt Management Office (DMO), as
it replaced the 2029s and 2049s with new issuances (2035 and 2050) for the bond
auction coming up later this month. This led to improved bids across the bond
curve, especially on the replaced issuances (2029s and 2049s), but with very
few offers, as market spread on the bid/offer tightened. Yields compressed by
c.97bps across the benchmark bond curve.
We expect a quiet market with slight bearish trend resuming in tomorrow's session, as no respite is in-sight for current global economic challenges.
Benchmark FGN Bonds |
||||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
|
14.50 15-Jul-21 |
8.45 |
6.99 |
(3.53) |
|
16.39 27-Jan-22 |
11.50 |
5.57 |
(1.17) |
|
12.75 27-Apr-23 |
11.57 |
9.35 |
(0.77) |
|
14.20 14-Mar-24 |
12.10 |
9.46 |
(0.71) |
|
13.53 23-Mar-25 |
11.65 |
7.90 |
(1.19) |
|
12.50 22-Jan-26 |
12.49 |
10.96 |
(1.01) |
|
16.29 17-Mar-27 |
12.47 |
10.91 |
(0.50) |
|
13.98 23-Feb-28 |
12.37 |
11.27 |
(0.58) |
|
12.15 18-Jul-34 |
12.68 |
11.71 |
(0.31) |
|
12.40 18-Mar-36 |
12.40 |
11.70 |
(0.59) |
|
16.2499 18-Apr-37 |
12.64 |
11.60 |
(0.35) |
|
14.80 26-Apr-49 |
13.00 |
12.81 |
(0.94) |
|
Treasury Bills
The Treasury Bills market maintained its bearish
course, as offers continued to improve across the OMO curve. The long-end of
the curve constituted the main axes, with Foreign Portfolio Investors being the
main drivers of the significant selling of OMO bills, as they traded above 16%
levels towards the tail-end of the market. Yields expanded by an average of
c.177bps across the benchmark OMO curve.
Similarly, the NTB side didn't ease up in its bearish
trend, as local investors continued to sell-off mostly at the short-end of the
NTB curve. Yields expanded by c.17bps across the benchmark NTB curve.
With persistent supply from offshore investors, we
expect to see more sell-off in OMO bills. We also anticipate a quiet session on
the local side, as attention shifts to T-bills PMA scheduled tomorrow.
Primary Market Auction Expectation |
|||
NTB - 11 Mar 2020 |
|
||
Tenor |
Offer (N'bn) |
Expected Rate (%) |
Previous Rate (%) |
91 days |
1.80 |
3.00-3.50 |
3.00 |
182
days |
14.00 |
3.50-4.00 |
4.00 |
364
days |
70.50 |
5.00-6.00 |
5.70 |
Benchmark OMO Bills |
|||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
NGOMO 19-Mar-20 |
17.00 |
12.00 |
2.00 |
NGOMO 2-Apr-20 |
17.00 |
14.00 |
2.00 |
NGOMO 14-May-20 |
17.00 |
15.25 |
2.00 |
NGOMO 4-Jun-20 |
16.25 |
14.75 |
1.25 |
NGOMO 2-Jul-20 |
16.50 |
12.25 |
1.50 |
NGOMO 13-Aug-20 |
17.00 |
13.00 |
2.00 |
NGOMO 3-Sep-20 |
17.00 |
12.35 |
2.00 |
NGOMO 1-Oct-20 |
17.00 |
12.25 |
1.80 |
NGOMO 3-Nov-20 |
17.00 |
13.00 |
1.70 |
NGOMO 1-Dec-20 |
17.00 |
13.00 |
1.70 |
NGOMO 5-Jan-21 |
17.00 |
15.25 |
1.70 |
NGOMO 02-Feb-21 |
16.85 |
13.00 |
1.55 |
Benchmark NTBills |
|||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
NIGTB 2-Apr-20 |
9.50 |
1.00 |
0.50 |
NIGTB 2-Jul-20 |
9.50 |
1.00 |
0.50 |
NIGTB 1-Oct-20 |
9.00 |
1.00 |
0.00 |
NIGTB 12-Nov-20 |
9.00 |
1.00 |
0.00 |
NIGTB 14-Jan-21 |
9.00 |
3.50 |
0.00 |
NIGTB 11-Feb-21 |
9.00 |
1.00 |
0.00 |
Money
Market
The Interbank rates dropped slightly, as banks had no
significant funding requirements, causing rates to drop by
c.180bps. OBB and OVN rates closed at 13.80% and 14.40%
respectively, with system liquidity opening with c.N244.24bn positive.
We expect rates to trade in tandem with tomorrow's
opening liquidity figures, as we anticipate rates to remain in double-digit
figures.
Money
Market Rates |
||
|
Current
(%) |
Previous
(%) |
Open Buy Back (OBB) |
13.80 |
15.50 |
Overnight (O/N) |
14.40 |
16.42 |
FX
Market
At the Interbank, the Naira/USD spot rate appreciated
by 5k to close at N306.95/$, while the SMIS rate remained unchanged to close at
N358.51/$. The Naira further depreciated at the I&E FX window, gaining 4k
to close at N366.75/$.
At the parallel market, cash rate significantly
depreciated by N4.20k to close at N363.00/$, while the transfer rate remained
unchanged at N370.00/$.
FX
Market |
||
Current
(N/$) |
Previous
( N/$) |
|
CBN Spot |
306.95 |
307.00 |
CBN SMIS |
358.51 |
358.51 |
I&E FX Window |
366.75 |
366.71 |
Cash Market |
358.80 |
358.80 |
Transfer Market |
370.00 |
370.00 |
Eurobond
The NGERIA Sovereign tickers
maintained its bearish trend, with yields weakening across the sovereign yield
curve, as investors continue to exit long positions in droves, largely due to
depressed oil prices, which stands at $36.33 to the barrel. Yields
further spiked by c.50bps across the benchmark yield curve.
It was all bears in the NGERIA Corps tickers,
as the effect of crashed oil prices was seen among most tracked papers. Yields
on SEPLLN 2023s weakened the most by c.691bps D/D, while the ACCESS 2021s and
FIDBAN 2022s retraced by c.288bps and c.175bps respectively.
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2.
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Dips Marginally to 4.0% WoW Buoyed by Improved System Liquidity
4.
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6.
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