Fixed Income Market Close The Week With Improved Demand

Proshare

Saturday, September 5, 2020 / 10:36 AM / Zedcrest Capital / Header Image Credit: Atlas Appraisal 


Proshare Nigeria Pvt. Ltd.


FGN Bonds

The FGN Bonds market closed the week on a more active note, as positive sentiments continue to seep in for bond yields. We noted improved bids across the curve, with most trades been executed at mid-levels of the bid/offer quotes. The 2049s and 2050s again were the most active securities, as trades were crossed above 10.00% on both papers. The 2035s also had demand return for it at 9.95% levels, as investors took advantage of the high yields when compared to similar yields on much longer-tenured papers. Quotes across the benchmark bond curve closed the session little changed from the previous day's close.

We expect local investors to continue to take on positions at these levels against inflows from maturities expected for this month. With the only supply from the monthly FGN bond auction still weeks away, secondary market yields should be gradually pressured downwards in the interim.

 

Benchmark FGN Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

 

16.39 27-Jan-22

5.85

3.95

0.00

 

12.75 27-Apr-23

6.00

5.15

(0.30)

 

14.20 14-Mar-24

6.40

5.15

0.00

 

13.53 23-Mar-25

7.20

5.80

0.00

 

12.50 22-Jan-26

7.45

6.65

0.00

 

16.29 17-Mar-27

8.40

8.00

0.05

 

13.98 23-Feb-28

8.55

8.05

0.00

 

14.55 26-Apr-29

9.15

8.45

0.00

 

12.15 18-Jul-34

10.15

9.60

0.00

 

12.40 18-Mar-36

10.15

9.90

0.00

 

16.2499 18-Apr-37

10.10

9.90

0.00

 

14.80 26-Apr-49

10.10

9.95

0.00

 

 

Treasury Bills

The OMO bills market picked up right where it left off from the previous trading session, with demand from local banks invested inflows from OMO maturities. Short-dated papers (Oct.-Nov.) were crossed around 2.00% levels while mid-dated papers (Jan.-Feb) traded around 2.20%. The long-end of the OMO curve traded above 3.00% today, bolstered by some offshore supply from the previous day's OMO auction. Rates compressed by c.88bps on the average across the benchmark OMO curve.

We expect demand from local banks to persist going into the new week, bolstered by relatively excess system liquidity levels.

 

Benchmark OMO Bills

Description

Bid (%)

Offer (%)

Day Change (%)

NGOMO 10/1/2020

3.00

0.01

(1.50)

NGOMO 11/03/2020

3.00

0.01

(2.00)

NGOMO 12/01/2020

4.00

0.01

(1.50)

NGOMO 01/05/2021

4.00

0.01

(1.50)

NGOMO 02/02/2021

4.00

0.01

(2.50)

NGOMO 03/02/21

4.00

0.01

0.65

NGOMO 05/11/21

5.00

0.01

1.00

NGOMO 06/08/21

5.00

0.01

0.00

NGOMO 08/10/21

5.00

0.01

(0.55)

 

Benchmark NTBills

Description

Bid (%)

Offer (%)

Day Change (%)

NIGTB 10/1/2020

2.50

0.01

0.00

NIGTB 11/12/2020

2.50

0.01

(0.50)

NIGTB 12/31/2020

3.00

0.01

0.00

NIGTB 01/14/2021

3.00

0.01

0.00

NIGTB 02/11/2021

3.50

0.01

0.25

NIGTB 04/29/2021

3.50

0.01

0.50

NIGTB 05/13/21

3.50

0.01

0.00

NIGTB 06/10/21

4.00

0.01

0.50

NIGTB 07/01/21

4.00

0.01

0.00

NIGTB 08/26/21

4.00

0.01

0.00

 

Money Markets

Interbank rates slumped further as market liquidity improved slightly by 2.38%, opening the day at c.N261.83bn positive and further boosted from a net inflow from OMO maturities of N221bn. Rates dipped by c.213bps on the average, as OBB and OVN rates closed the day at 2.50% and 3.25% respectively.

We expect rates to remain stable tomorrow in the lower single-digit range, with the outside chance of a net negative CRR debit the only threat to current market rates.

 

Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

1.63

2.50

Overnight (O/N)

2.25

3.25


 

FX Market

Dollar liquidity in the interbank I & E market remained fairly stable, with traded volumes down only 0.03% ($89.15mio traded) but with a wider range as the highest rate traded touched N395.13/$. The closing rate remained little changed at N386.13/$.

Demand on the streets for the greenback improved today matched with little supply. The cash and transfer rates lost another N3.00 and N5.00 respectively at the close of the trading session, closing the week at N441/$ and 455/$ respectively.

 

FX Market

Current (N/$)

Previous ( N/$)

CBN Spot

379.00

379.00

CBN SMIS

380.69

380.69

I&E FX Window

386.13

386.25

Cash Market

441.00

438.00

Transfer Market

455.00

450.00

 

Eurobonds

The NIGERIA Sovereigns closed the trading week with mixed sentiments across the curve in the face of weaker oil prices. Offers improved at the longer end of the sovereign curve, as yields closed the session a single basis point higher on the average.

Again, the NIGERIA Corporates had another unremarkable session with little activity to report.

 

Proshare Nigeria Pvt. Ltd.



Proshare Nigeria Pvt. Ltd.



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