Fixed Income Securities Activities Remained Depressed Triggered by Low System Liquidity

Proshare

Wednesday, June 10 2020 / 09:50 AM / Zedcrest Capital / Header Image Credit: Nikunj Investments


Proshare Nigeria Pvt. Ltd.


FGN Bonds

The Bond Market traded on a quiet note, with pockets of demand seen across the curve. The long-end continue to garner most of the market interest, as participant cherry pick on the few bonds offered at a juicy level. Yields remained fairly stable with no significant change D/D.

 With current the secondary market levels and a less buoyant system liquidity, we expect market trades to remain slim in tomorrow's trading session.


Benchmark FGN Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

 

14.50 15-Jul-21

6.77

4.76

(0.02)

 

16.39 27-Jan-22

7.71

5.33

0.12

 

12.75 27-Apr-23

9.04

8.36

0.00

 

14.20 14-Mar-24

9.07

8.35

0.00

 

13.53 23-Mar-25

8.36

7.49

0.00

 

12.50 22-Jan-26

9.67

9.30

0.00

 

16.29 17-Mar-27

10.86

10.15

0.00

 

13.98 23-Feb-28

10.51

10.00

0.00

 

14.55 26-Apr-29

10.81

10.35

0.00

 

12.15 18-Jul-34

11.35

10.98

0.00

 

12.40 18-Mar-36

11.36

11.05

0.00

 

16.2499 18-Apr-37

11.25

11.05

(0.09)

 

14.80 26-Apr-49

12.26

12.05

0.01

 

 

Treasury Bills

The Treasury Bills market traded on a quiet note, as we continued to see slightly better offers at the long-end OMO curve. February bills saw most of the love although very few orders were filled due to the highly dispersed bid/offer quotes by participants. Yields were fairly stable for most part of the trading session expanding slightly by c.1bp on the benchmark OMO curve.

The NTB side continued its lethargic cadence, with a wide market bid and offer spread and less trade consummated during the trading session.

We expect trading session to continue on a quiet note tomorrow, as attention shifts to the Primary Market Auction which is expected to be heavily bided by mostly retail clients. The DMO is looking to rollover the total maturities worth c.N90.94.

  

Benchmark OMO Bills

Description

Bid (%)

Offer (%)

Day Change (%)

NGOM 6/4/2020

4.00

0.10

0.00

NGOM 7/2/2020

7.05

1.50

0.05

NGOM 8/13/2020

7.00

1.50

0.00

NGOM 9/3/2020

7.00

1.50

0.00

NGOM 10/1/2020

7.55

1.50

0.05

NGOM 11/03/2020

7.50

1.50

0.00

NGOM 12/01/2020

7.90

1.50

(0.10)

NGOM 01/05/2021

8.00

1.50

0.00

NGOM 02/02/2021

6.20

1.50

0.10

NGOM 03/02/21

6.15

1.50

0.00

 

Benchmark NTBills

Description

Bid (%)

Offer (%)

Day Change (%)

NIGTB 2-Jul-20

4.00

0.10

0.00

NIGTB 1-Oct-20

4.50

0.10

0.00

NIGTB 12-Nov-20

4.50

0.10

0.00

NIGTB 14-Jan-21

4.90

0.10

(0.10)

NIGTB 11-Feb-21

5.00

0.15

0.00

 

Primary Market Auction Expectation

                                        NTB  - 11 Jun 2020

 

Tenor

Offer (N'bn)

Expected Rate (%)

Previous Rate (%)

91 days

1.80

2.00-2.50

2.4500

182 days

4.50

2.50-3.00

2.7200

364 days

84.64

3.50-4.20

4.0199

 

 

Money Markets

Tightened system liquidity has caused money market rates to remain in double-digit figures although OBB and OVN closed the day at 14.50% and 15.42% respectively, same as yesterday's level. Although  System liquidity opened at c.N107.43, this was less sufficient for running the market's daily activities.
 
We do not expect a reversal in interbank rates given that there are no inflows expected to ease market tightness for the week.


Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

14.50

14.50

Overnight (O/N)

15.42

15.42

 

FX Market

At the FX interbank market, most of the rates remained unchanged as FX supply continued to dwindle across all markets. The I&E FX window however adjusted slightly downward closing the day at 387.03/$ albeit low volumes($31.81M) passing through the market.


FX Market

Current (N/$)

Previous ( N/$)

CBN Spot

361.00

361.00

CBN SMIS

380.69

380.69

I&E FX Window

387.08

387.33

Cash Market

447.00

447.00

Transfer Market

453.00

453.00

 

Eurobonds

The NGERIA Sovereign tickers opened flat, as we saw little activity across the curve in the opening hours of the session. Activity picked up later as we saw improved offers compared to yesterday's level. Yields expanded by c.10bps across the sovereign yield curve.

The NGERIA Corps tickers traded however was more bullish with little offer to support market appetite. Yields dipped on all the corporate bonds but most especially on Zenith 22s and UBANL 22s compressing at an average of c.86bps.


Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.


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Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.

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