| Bonds & Fixed Income |    776 VIEWS  |
| Bonds & Fixed Income | |
| 776 VIEWS | |
 |
Wednesday, February 19,
2020 / 07:00 AM / Zedcrest Capital / Header Image Credit: Financial Tribune
Below are highlights of
trading activities in the fixed income and forex market on February 19, 2020
FGN Bonds
The
Bond Market opened on a fairly quiet note, as attention shifted to the bond
auction. We, however, saw decent demand on bonds offered at the auction, as
market players traded on perceived sentiment of possible auction outcome.
Yields dropped by c.1bp across the benchmark bond curve.
At
the bond auction, the DMO sold a total of c.N100bn across the three maturities
on offer (2023s, 2029s and 2049s), dropping stop rates by c.110bps, c.42bps and
c.41bps to close at 8.75%, 10.70% and 12.15% respectively, with bid-to-cover
ratios of 1.74X, 2.12X and 4.48X across all 3 tenors.
We
expect a bullish market in tomorrow's session, buoyed by significant inflows
from OMO maturities (c.N620bn) and market players' looking to cover lost bids
at today's bond auction.
|
FGN Bonds Result - 19 February 2020 |
||||
|
Maturity |
Rate (%) |
Offer (N'bn) |
Sub (N'bn) |
Sale (N'bn) |
|
Apr-23 |
8.75 |
45.00 |
78.43 |
30.00 |
|
Apr-29 |
10.70 |
45.00 |
95.70 |
30.00 |
|
Apr-49 |
12.15 |
50.00 |
224.07 |
40.00 |
|
Benchmark
FGN Bonds |
||||
|
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
|
|
14.50 15-Jul-21 |
8.30 |
7.15 |
(0.02) |
|
|
16.39 27-Jan-22 |
8.17 |
7.24 |
(0.01) |
|
|
12.75 27-Apr-23 |
9.22 |
8.96 |
(0.22) |
|
|
14.20 14-Mar-24 |
10.01 |
9.37 |
0.00
|
|
|
13.53 23-Mar-25 |
9.86 |
9.50 |
0.00
|
|
|
12.50 22-Jan-26 |
10.42 |
9.86 |
0.00
|
|
|
16.29 17-Mar-27 |
11.00 |
10.34 |
0.00
|
|
|
13.98 23-Feb-28 |
10.80 |
10.65 |
(0.04) |
|
|
12.15 18-Jul-34 |
11.41 |
11.14 |
0.01 |
|
|
12.40 18-Mar-36 |
11.36 |
11.15 |
0.02 |
|
|
16.2499 18-Apr-37 |
11.52 |
11.06 |
0.19 |
|
|
14.80 26-Apr-49 |
12.35 |
12.28 |
(0.04) |
|
Treasury Bills
The Treasury Bills market traded on an active note,
as yields continue to plunge across the OMO curve. With OMO Maturities of
c.N620bn expected to flow-in tomorrow, we saw strong buy-interest in OMO bills,
especially the mid (1-Oct & 27-Oct) to long-dated OMO bills (19-Jan), as
investors' reinvested incoming maturities. Yields dropped by an average of
c.11bps across the curve.
The NTB side traded flat with a bearish undertone,
as local investors sold-off in a bid to reinvest in other eligible fixed income
instruments. Yields expanded by an average of c.60bps across the benchmark NTB
curve.
We expect sustained demand of OMO maturities in tomorrow's session, as market players continue to reinvest the c.N620bn of maturing bills coming in tomorrow. We also anticipate the apex bank to float an OMO auction to tame excess liquidity.
|
Benchmark OMO Bills |
|||
|
Description |
Bid (%) |
Offer (%) |
Day Change
(%) |
|
NGOMO 19-Mar-20 |
12.50 |
10.00 |
(0.10) |
|
NGOMO 2-Apr-20 |
12.50 |
10.50 |
0.00 |
|
NGOMO 14-May-20 |
12.50 |
10.00 |
0.15 |
|
NGOMO 4-Jun-20 |
12.00 |
10.00 |
(0.25) |
|
NGOMO 2-Jul-20 |
12.45 |
10.00 |
0.05 |
|
NGOMO 13-Aug-20 |
12.40 |
11.00 |
0.00 |
|
NGOMO 3-Sep-20 |
12.50 |
10.00 |
(0.10) |
|
NGOMO 1-Oct-20 |
12.40 |
11.50 |
(0.30) |
|
NGOMO 3-Nov-20 |
12.50 |
11.80 |
(0.20) |
|
NGOMO 1-Dec-20 |
12.30 |
11.85 |
(0.20) |
|
NGOMO 5-Jan-21 |
12.30 |
11.90 |
(0.30) |
|
Benchmark
NTBills |
|||
|
Description |
Bid (%) |
Offer (%) |
Day Change
(%) |
|
NIGTB 2-Apr-20 |
7.00 |
1.00 |
1.00 |
|
NIGTB 2-Jul-20 |
7.50 |
1.00 |
0.50 |
|
NIGTB 1-Oct-20 |
7.50 |
2.00 |
0.50 |
|
NIGTB 14-Jan-21 |
7.50 |
2.00 |
0.50 |
`
Money Market
System liquidity opened with c.N461.84bn, with rates dropping c.15bps
after yesterday's slight reaction to the release of inflation figures. OBB and
OVN rates closed at 3.20% and 4.10% respectively.
We expect rates to slightly drop, as inflows from OMO maturity
(c.N620bn) positively impacts system liquidity, despite a potential mop-up by
the CBN.
|
Money Market Rates |
||
|
|
Current (%) |
Previous (%) |
|
Open
Buy Back (OBB) |
3.20 |
3.42 |
|
Overnight
(O/N) |
4.10 |
4.17 |
FX Market
At the Interbank, the Naira/USD spot rate dipped by
50k to close at N307.00/$, while the SMIS rate remained unchanged at N358.51/$.
The Naira appreciated at the I&E FX window, losing 4k to close the session
at N364.91/$.
The parallel market witnessed significant changes,
as the cash rate appreciated by 30k to close at N358.20/$, while the transfer
rate depreciated by 50k to close the day at N365.00/$.
Eurobond
The NGERIA Sovereign tickers traded on a quiet note, with mixed sentiment across the sovereign yield curve. The long-end saw some slight sell-off, while the short to mid-end traded on a bullish note, reeling from a c.3.45% spike in oil prices D/D.
Demand persisted in the NGERIA Corps tickers, as yields continue to dip among most tracked papers. The SEPLLN 2023s further dipped by c.6bps, while the ACCESS 2021s and ETINL 2024s dropped by c.1bp apiece.
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