DMO Sells N330bn Worth of FGN Bonds on the Back of a Strong FGN Bond Auction Demand

Proshare

Friday, July 02, 2021 / 10:00 AM / By Zedecrest Capital / Header Image Credit: wblr

 

 

Below are highlights from the fixed income and forex market on July 01, 2021

 

 

FGN Bonds 

The FGN Bonds market opened the new month quiet at first, with scarce offers as market participants continue to strategize ahead of the 15-July-2021 Bond maturity. Trading activity picked up later in the session at the mid- and long-ends of the curve. At the mid-end, we saw the 2027s and 2028s papers change hands around the 12.10% range albeit in small trade volumes. The 2050s was the most active paper, as the only bond offered at 13.00% levels, and demand on the paper brought yields down by 15bps D/D. Consequently, yields compressed by an average of c.3bps across the benchmark curve.

 

We expect trade activity to pick up as participants settle in for the month, with a continued bullish bias ahead of the bond maturity.


Benchmark FGN Bonds 

 

Description 

Bid (%) 

Offer (%) 

Day Change (%) 

12.75 27-Apr-23 

11.65

11.20

0.00

14.20 14-Mar-24 

12.00

11.35

0.00

13.53 23-Mar-25 

12.20

11.60

0.00

12.50 22-Jan-26 

12.40

12.00

0.00

16.29 17-Mar-27 

12.45

12.10

0.00

13.98 23-Feb-28 

12.50

12.20

0.00

14.55 26-Apr-29 

12.50

12.20

0.00

12.15 18-Jul-34 

12.80

12.25

0.00

12.50 27-Mar-35 

13.00

12.60

(0.10)

12.40 18-Mar-36 

13.00

12.50

0.00

16.2499 18-Apr-37 

13.00

12.50

0.00

9.80 24-Jul-45 

12.80

12.40

(0.10)

14.80 26-Apr-49 

13.10

12.85

(0.05)

12.98 27-Mar-50 

13.10

13.00

(0.15)

 

 

 

 

Treasury Bills 

The Treasury bills market resumed the month on a whimper, despite improved supply from the previous day’s primary auction. The newly issued 1-year paper (30Jun2022) opened the day with a lot of demand interest as investors looked to cover lost auction bids. However, trades on the paper were sparse as the bid/ask spread refused to close for most of the trading session as the bill remained quoted at 8.85/50 with neither side willing to budge. We also noted the supply of OMO papers from local banks, with offshore investors opting instead for shorter-dated papers like the Special CRR Bills.


We expect trading activities to remain tepid in the treasury bills space as banks continue to offload their OMO/NT Bills holdings in the quest to raise cash to fund their obligations.


Benchmark OMO Bills 

Description 

Bid (%) 

Offer (%) 

Day Change (%) 

NGOMOB 0 09/07/21 

11.00 

1.50 

0.00  

NGOMOB 0 10/19/21 

11.00 

3.00 

0.00  

NGOMOB 0 11/02/21 

12.00 

2.00 

0.00  

NGOMOB 0 12/07/21 

12.00 

2.50 

0.00  

NGOMOB 0 01/11/22 

12.50 

2.50 

0.00  

NGOMOB 0 02/01/22 

12.50 

2.50 

0.00  

NGOMOB 0 03/01/22 

12.50 

3.50 

0.00  

Benchmark NT-Bills 

Description 

Bid (%) 

Offer (%) 

Day Change (%) 

NIGTB 0 05/13/21 

8.00 

1.50 

0.00  

NIGTB 0 06/10/21 

9.00 

1.50 

0.00  

NIGTB 0 07/01/21 

10.00 

2.00 

0.00  

NIGTB 0 08/26/21 

10.00 

2.00 

0.00  

NIGTB 0 09/09/21 

10.00 

2.00 

0.00  

NIGTB 0 10/14/21 

10.00 

2.50 

0.00  

NIGTB 0 11/11/21 

11.00 

2.50 

0.00  

NIGTB 0 01/13/22 

11.00 

3.00 

0.00  

NIGTB 0 02/10/22 

11.00 

3.00 

0.00  

NIGTB 0 03/01/22 

8.00 

1.50 

0.00  

 

Money Markets 

Money market rates remained stable for a consecutive session, as the system liquidity opened in positive territory of (c.N25bn+) despite net negative debits from the NTB auction settlements. Local banks camped at the CBN Lending and Repo windows to fund their daily operations, increasing borrowing from the Apex bank by c.N48Bn D/D. OBB and Overnight rates closed unchanged at 11.50% and 12.00%, respectively.


We expect interbank rates to remain stable to close the week, as funding pressure eases on banks’ positions.

Money Market Rates 

  

Current (%) 

Previous (%) 

Open Buy Back (OBB) 

11.50

11.50

Overnight (O/N) 

12.00

12.00

 

FX Market  

The FX space opened the day on a sluggish as traders continued to scramble for funds amidst the poorly supplied FX market.  Traded volumes dipped by 62% from the previous day’s close while the Naira appreciated by N0.80k to close at N410.70/$, The bided range amongst banks remained wide between N400/$ and N420.95/$.


At the parallel market, the cash and transfer market remained unchanged for another consecutive session.


FX Market 

 

Current (N/$) 

Previous (N/$) 

CBN SMIS 

380.69

380.69

I&E FX Window 

410.70

411.50

Cash Market 

500.00

500.00

Transfer Market 

512.00

512.00

 

Eurobonds: 

The Sub-Saharan Africa space closed the month’s first trading session slightly in the red, with threats to the OPEC+ deal surfacing from the UAE and causing the cartel to postpone its decision on output increases till Friday. With crude oil seating firmly above $75pb, we saw risk shift towards the short-end (2022s and 2023s) of the NIGERIA Sovereign curve as investors looked to protect themselves from any oil-related volatility.

 

The NIGERIA Corporates tickers continued to enjoy positive flows, with demand seen across most tracked papers. The UBANL 2022s and SEPLLN 2023s lead the gainers, as yields on both papers compressed by 17bps and 14bps respectively as local and offshore investors continued to pile in.

 



Proshare Nigeria Pvt. Ltd.



 Kindly share and stay connected with us on our platforms HERE


You can also subscribe to our NEWSLETTER  



 Proshare Nigeria Pvt. Ltd.

 

Related News

1.      Coronation Merchant Bank Lists N25bn Bond on NGX

2.     Ahead of Nigerian Treasury Bills (NTB) Auction Scheduled for 30 June 2021

3.     Tepid Performance Persists as Average Yield on NT-Bills Closes Flat at 6.50% WoW

4.     Fixed Income Q2 2021: Rising Supply of Paper, Wider Yields

5.     Another Step Towards the DMO's Funding Target

6.     June 2021 FGN Bond Auction Review: Rates Party Coming to a Close?

7.     Summary of FGN Bond Auction Results for June 2021

8.     DMO Sells N330bn Worth of FGN Bonds on the Back of a Strong FGN Bond Auction Demand

9.     FG, Corporates Raised N4.58trn from the Fixed Income Market as of June 3rd, 2021 - NGX

10.  ETI Opens the Market at the LSE after Successfully Listing its US$350m Sustainability Bond

11.   System Liquidity Rolls Back into Negative as Banks Opens Fresh REPO With CBN

12.  Ahead of Next FGN Bond Auction Scheduled for 23rd June 2021

13.  A Tad Bearish Day in The FGN Bonds Market Ahead of the June 2021 FGN Bond Auction

14.  Slight Pullback in FGN Bond Yields as Demand Pressure Subsides

 

Proshare Nigeria Pvt. Ltd.



Proshare Nigeria Pvt. Ltd.

READ MORE:
Related News
SCROLL TO TOP