Nigerian Eurobonds Sustain Rally Momentum As Global Oil Prices Continue To Gain

Proshare

Wednesday, May 06, 2020 / 9:49 PM / by Zedcrest Capital / Header Image Credit: iStock

 

Proshare Nigeria Pvt. Ltd.


FGN Bonds

The FGN bond market opened the day on a weaker note, as the more sellers emerged on most on the benchmark papers while bids remained shy for most of the session. We noted some local investors pick on some improved offers at the short- (2023s) and mid-end (2027s & 2028s) of the curve, as the bid/offer spreads tightened across traded maturities. Yields expanded by an average of c.50bps across the benchmark bond curve.

We expect trades to remain scanty, with some cherry-picking at the belly of the curve, as market participants continue to weigh expectations of more supply following the DMO's revised local borrowing plan.


                   Benchmark FGN Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

 

14.50 15-Jul-21

6.48

4.23

0.18

 

16.39 27-Jan-22

7.54

5.34

0.04

 

12.75 27-Apr-23

9.97

8.50

0.15

 

14.20 14-Mar-24

10.18

8.32

0.00

 

13.53 23-Mar-25

8.89

8.15

0.27

 

12.50 22-Jan-26

9.70

9.20

0.30

 

16.29 17-Mar-27

10.90

10.46

0.13

 

13.98 23-Feb-28

11.14

10.79

0.02

 

14.55 26-Apr-29

11.30

10.69

0.02

 

12.15 18-Jul-34

11.36

10.95

0.00

 

12.40 18-Mar-36

11.50

11.22

0.01

 

16.2499 18-Apr-37

11.51

11.20

0.09

 

14.80 26-Apr-49

12.48

12.35

0.03

 

 

Treasury Bills

The Treasury Bills market continued in its low drift, with minor activities tilted towards mid- to longer-dated bills (Jan. and Mar. maturities especially) as sellers looked to book profits in the scantily bided market. Yields expanded by c.46bps across the benchmark OMO curve, where most bills were offered at better rates compared to yesterday.

Similarly, the NTB side remained quiet with retail demand driving some activity at the short-end of the curve. Yields compressed by c.60bps on the average across the benchmark NTB curve.

We expect yields to continue to tick higher, especially on the longer-dated OMO bills, as FPIs continue to supply the market to book profits at these levels.


                                    Benchmark OMO Bills

Description

Bid (%)

Offer (%)

Day Change (%)

NGOM 5/14/2020

11.00

7.80

0.60

NGOM 6/4/2020

11.00

6.00

2.00

NGOM 7/2/2020

11.25

6.00

2.00

NGOM 8/13/2020

11.25

7.00

2.00

NGOM 9/3/2020

11.25

7.00

1.00

NGOM 10/1/2020

11.50

8.00

3.00

NGOM 11/03/2020

11.50

8.00

2.00

NGOM 12/01/2020

11.75

8.50

0.00

NGOM 01/05/2021

11.75

10.00

1.00

NGOM 02/02/2021

11.10

9.00

0.00

NGOM 03/02/21

11.10

9.00

0.00

 

 

                                      Benchmark NTBills

Description

Bid (%)

Offer (%)

Day Change (%)

NIGTB 2-Jul-20

2.50

0.50

(1.50)

NIGTB 1-Oct-20

3.00

1.00

(1.00)

NIGTB 12-Nov-20

3.50

1.00

(0.50)

NIGTB 14-Jan-21

3.70

1.00

0.00

NIGTB 11-Feb-21

4.00

1.00

0.00

 


Proshare Nigeria Pvt. Ltd.


Money Markets

System liquidity figures opened today with c. N267bn positive, as money market rates further recoiled by an average of c.100bps. The OBB and OVN rates consequently closed the day lower at 3.50% and 4.25% respectively.

We expect rates to remain in the single-digit corridor with no significant funding pressure expected until Friday where it will most likely increase slightly to accommodate the bi-weekly retail intervention auction funding.


                       Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

3.55

4.50

Overnight (O/N)

4.25

5.38

 

FX Market

The USD/cash market closed slightly higher compared to yesterday while most of the other market remained relatively flat. However, in the I&E interbank window, we saw the scarcity of dollars continue today with very little activity as banks remained bid between N 383.00 and N 387.00 to the dollar.


                             FX Market

Current (N/$)

Previous ( N/$)

CBN Spot

361.00

361.00

CBN SMIS

380.69

380.69

I&E FX Window

384.50

385.40

Cash Market

436.00

435.00

Transfer Market

455.00

455.00

 

Eurobonds

The NGERIA Sovereign tickers continued its bullish trend, as sentiments improved for the oil-producing nation in correlation with the rising crude oil price. Yields compressed by c.28bps across the sovereign curve, with the biggest moves on the short-dated papers (NG 2021s to 2023s). 

The NGERIA Corps tickers also traded positive, as local demand improved on most tracked tickers. The UBA 22s and FIDBAN 22s saw the highest moves on the day, as their yields compressed by c.21bps and c.11bps respectively.

 

 Proshare Nigeria Pvt. Ltd.



Proshare Nigeria Pvt. Ltd.


Related News

1.       United Capital Plc's Series 1 and Series 2 bonds Issuance Programme Is Coming Soon

2.      Naira Strengthens As Expectations For Improved Supply Calms The Market

3.      Weak Sentiments Dominate the NT-Bills Market Despite Improved System Liquidity

4.      CBN Sells N100bn At OMO Auction To Manage Excess System Liquidity

5.      Senate Gives Approval as DMO Switches Out N850bn External Borrowing Plans For Local Debt

6. FG to Convert N850bn New External Borrowing in The 2020 Appropriation Act to Domestic Borrowing

7.      Anchoria Fixed Income Monitor: Investors' Appetite Remained Strong at Bond Auction

8.     A Highly Provisional Calendar from the DMO

9.      Supply Of The Greenback Dwindles, Causing Value Of The Naira To Drop 6% In The Streets

10.  Average Yield Settled at 2.7% on High Liquidity; The CBN Debits Banks N1.4trn in Special CRR

 

Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.

READ MORE:
Related News
SCROLL TO TOP