| Bonds & Fixed Income |    1303 VIEWS  |
| Bonds & Fixed Income | |
| 1303 VIEWS | |
 |
Friday, August 08, 2020 / 07:44 AM / By
Zedcrest Capital / Header Image Credit: BusinessDay NG
Below are highlights of trading activities in the fixed income and forex market on August 08, 2020.
FGN Bonds
The FGN bond market started trading today on a sluggish note but
activity picked up by mid-day as local investors began to scramble for bonds,
particularly the 'auction bonds' of 2026s, 2035s, and 2045s which settled at
7.00%, 9.55%, and 9.60% respectively. Spreads at the long-end of the curve (2049s
and 2050s papers) opened pretty wide in the earlier hours at 10.30/9.90 but
closed up with most of the trades settling around 10.00%. Consequently, yields
compress on across the benchmark curve by c.98bps on the average of across the
curve to close the week on a positive note.
We expect to see more activities in the market in the coming week,
as demand is anticipated to continue to filter in at these levels against thin
supply volumes.
|
Benchmark FGN Bonds |
||||
|
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
|
|
16.39 27-Jan-22 |
5.00 |
2.80 |
(3.24) |
|
|
12.75 27-Apr-23 |
7.05 |
4.20 |
(1.48) |
|
|
14.20 14-Mar-24 |
7.10 |
4.50 |
(1.80) |
|
|
13.53 23-Mar-25 |
7.50 |
5.15 |
(1.45) |
|
|
12.50 22-Jan-26 |
8.00 |
6.15 |
0.30 |
|
|
16.29 17-Mar-27 |
8.85 |
7.10 |
(0.77) |
|
|
13.98 23-Feb-28 |
8.75 |
7.40 |
(1.29) |
|
|
14.55 26-Apr-29 |
9.45 |
8.20 |
0.03 |
|
|
12.15 18-Jul-34 |
10.05 |
9.05 |
(0.52) |
|
|
12.40 18-Mar-36 |
10.10 |
8.90 |
(0.54) |
|
|
16.2499 18-Apr-37 |
10.15 |
9.80 |
(0.57) |
|
|
14.80 26-Apr-49 |
10.08 |
9.75 |
(0.48) |
|
Treasury
Bills
The OMO bills space woke from its previous muted note with few
trades seen on longer-dated bills. May/June bills were in high demand today
starting at 4.60% before trending downward and shedding around c.20bps before
the bulls took a pause.
At the NTB space, we saw continued retail demand for July bills
which traded around 3.00% levels.
Next week, we expect the treasury bills rates to remain steady at
these levels. However, activities may improve slightly should the CBN float an
OMO auction during the week.
|
Benchmark OMO Bills |
|||
|
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
|
NGOMO 8/13/2020 |
4.00 |
0.01 |
0.00 |
|
NGOMO 9/3/2020 |
4.50 |
0.01 |
0.00 |
|
NGOMO 10/1/2020 |
4.50 |
0.01 |
0.00 |
|
NGOMO 11/03/2020 |
5.00 |
0.01 |
0.00 |
|
NGOMO 12/01/2020 |
5.00 |
0.01 |
0.00 |
|
NGOMO 02/02/2021 |
6.00 |
1.00 |
0.00 |
|
NGOMOB 0 03/02/21 |
6.00 |
1.00 |
0.00 |
|
NGOMOB 0 03/02/21 |
6.00 |
1.00 |
0.00 |
|
NGOMOB 0 05/11/21 |
6.00 |
1.00 |
0.00 |
|
Benchmark NTBills |
|||
|
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
|
NIGTB 10/1/2020 |
2.50 |
0.01 |
0.00 |
|
NIGTB 11/12/2020 |
3.00 |
0.01 |
0.00 |
|
NIGTB 01/14/2021 |
3.00 |
0.10 |
0.00 |
|
NIGTB 02/11/2021 |
3.50 |
0.10 |
0.00 |
|
NIGTB 04/29/2021 |
3.50 |
0.10 |
0.00 |
|
NIGTB 05/13/21 |
4.00 |
0.10 |
0.00 |
|
NIGTB 06/10/21 |
4.00 |
0.10 |
0.00 |
Money
Markets
Money market rates dropped further by c.157bps on the average
during today's trading session, largely supported positive system liquidity of
c.N225.69BN with no funding pressures on local banks. OBB and OVN rates to close
the week at 6.33% and 7.17% respectively.
We expect the market rates to revolve around the single-digit
corridor for most of the coming week, while inching up slightly towards the weekend
as participants seek funding for the bi-weekly retail intervention auction.
|
Money Market Rates |
||
|
|
Current (%) |
Previous (%) |
|
Open Buy Back (OBB) |
6.33 |
8.00 |
|
Overnight (O/N) |
7.17 |
8.64 |
FX
Market
At the FX space, we saw movement at the cash and transfer market
which depreciated by an average N1.50k as demand began to pick up amidst short
supply consequently closing at N473/$ and N475/$ respectively. The I&E FX
market also depreciated by 0.50K closing the week at N386/$.
In other news, the CBN finally updated the spot rate on their
website from N361/$ to N379/$ in another step the Apex bank is taking towards
the unification of its exchange rate.
|
FX Market |
||
|
Current (N/$) |
Previous ( N/$) |
|
|
CBN Spot |
381.00 |
381.00 |
|
CBN SMIS |
380.69 |
380.69 |
|
I&E FX Window |
386.00 |
385.50 |
|
Cash Market |
473.00 |
472.00 |
|
Transfer Market |
475.00 |
473.00 |
Eurobonds
At NGERIA Sovereign space, we saw slight retracement in
bids as oil prices dropped slightly below $45/barrel. Although the market had a
pretty quiet session, we saw yields compressed slightly by an average of c.4bps
across the curve.
The NGERIA
Corps also had a quiet session, while the only movement seen amongst
the tracked papers was on UBA 2022s and SEPPLN 2022s which strengthened by
c.5bps and c.9bps respectively.
Related News
1. The Bears Took a
Pause, Dampening Yields Slightly In the Fixed Income Space
2.
DMO Announces the Resumption of FGN Savings Bond Offer in
August 2020
3.
Local Investors Turn Bears To Meet Up Regulatory Funding
Obligations
4.
Special CRR Debit by Central Bank of Nigeria Gulps a
Larger Chunk of the Interbank System Liquidity
5.
Anchoria Fixed Income Monitor: Forex Illiquidity Lingers
6.
Average NT-Bills Yield Remains Unchanged at 1.8% as
Investors Partake in PMA
7.
Heavy Demand at the NTB Auction as Rates Dropped
Significantly On 91 days and 182 days Bills
8.
Heavy Market Liquidity Continues To Drive OMO Rates Down
The Tide
9.
Treasury Bill Auction Holds On Wednesday July 29th, 2020
10. Interbank System Awash With Liquidity As Apex Bank Holds
Back On OMO Issuance
11.
Anchoria Fixed Income Monitor: Booming Gold Price amid
Pandemic
12. Average NT-Bills Yield Declines to 1.8%; PMA Holds this
Wednesday
13. NOVA Merchant Bank's Debut N10bn Bond Oversubscribed by
300%
14. The DMO's Latest Good Effort
15. DMO Laughs To The Bank At FGN Bond Auction, Raising 30-Year Debt at 9.95%
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