NAFEX Rate hits 4-Month High amid Offshore Selloff


Wednesday, May 09, 2018 07:00 PM/Zedcrest Capital

***Senate to pass major oil reforms by July*** - Saraki

Proshare Nigeria Pvt. Ltd.


The bond market traded with volatile swings, as spreads widened across the curve on fears of continued selloff by offshore. The Medium to long end of the curve remained weak, with the 22s also taking some hit on the shorter end. Yields consequently rose by c.10bps across the curve. We however note a slowdown in selling pressures and consequently expect some pullback in yields due to renewed buying interests from clients at current levels.

Proshare Nigeria Pvt. Ltd.


Treasury Bills

The T-bills market remained bearish, with yields rising higher by c.30bps. This came as market players repriced their quotes in anticipation of an OMO auction by the CBN tomorrow.  We expect the market to remain bearish on the back of expectations of a marginal hike in the OMO auction stop rate as in the past two auctions. There are however fears of a significant under allotment and proration of bids, which could fuel renewed buying interests in the secondary market.


 Proshare Nigeria Pvt. Ltd.

Money Market

The OBB and OVN rates inched slightly higher to 7.08% and 7.75% respectively, following outflows of c.N50bn for wholesale FX settlement which compressed system liquidity to c.N180bn positive. We expect rates to remain relatively stable tomorrow, as inflows from OMO maturities (c.N273bn) are expected to offset outflows for the expected OMO auction sales.


 Proshare Nigeria Pvt. Ltd.

FX Market

The Interbank rate remained stable at its previous rate of N305.75/$, with the CBN’s external reserves recorded to have improved by 1.52% to $47.80bn as at 7-May. The NAFEX rate depreciated by 0.14% to a four month high of N361.14/$. Rates in the Unofficial market however remained stable at N361.40/$.


Proshare Nigeria Pvt. Ltd. 


The NGERIA Sovereigns remained significantly bearish, with selloffs mostly on the long end of the curve (38s and 47s) which lost -1.50pt on average. Yields consequently rose by c.20bps, with the 2047s trading closer to 8% (Last Trade at 7.95%).


The NGERIA Corps remained bearish across most traded tickers, with investors mostly bearish on the Zenith and UBANL 22s which lost –0.80pt. The FIDBAN 22s and SEPLLN 23s were also sold slightly, loosing –0.25pt.


Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.



Related News

1.       Renewed Offshore Selloff Lifts Bond yields by c.25bps

2.       Funding Rates Spike to One Month High Amid CBN FX Interventions

3.       May 2018 FGN Savings Bonds Offer for Subscription

4.       Bond Yields rise to 3-Week High amid Profit taking by Offshore on the 20-yr

5.       The Returning Foreign FI Investor

6.       CBN Sells N600bn T-bills to Mop up Excess Inflows from Maturing Bills

7.       N95bn T-bills PMA gets Oversubscribed by 420% as Stop rates crash by c.100bps

8.       CBN to Auction N95bn Treasury Bills after Mayday Break

9.       Buying Interest to Sustain Bullish Trend Ahead of PMA

10.   Market Players Trade with Mixed Sentiments amid OMO Uncertainty

11.   April 2018 FGN Bond Auction - Total Subscription Was N262.48bn, A Subscription Rate of 292%.

12.   Another Auction In Line With The Script

13.   Bearish Reversals in FI yields as CBN Resumes OMO at Slightly Higher Rate

14.   Summary of April 2018 FGN Bond Auction

15.   DMO Sells N90bn of 3, 5 and 10-yr Bonds at About 3 times Bid to Cover


Related News