Bonds & Fixed Income | |
Bonds & Fixed Income | |
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PROSHARE |
Monday, March 23, 2020 / 9:39 PM / Zedcrest Capital / Header Image Credit: Money Check
FGN Bonds
The Bonds
Markets opened the week on a quiet note, as we saw lethargic activities across
the bond curve, stemming from the growing number of Coronavirus cases. Spread
between bid and offer was wide, as market players traded cautiously ahead of
the outcome in tomorrow's MPC meeting and Bond auction on Wednesday. The
mid-end of the curve (2028s) saw some slight demand as market participants
seemed comfortable at the belly of the yield curve. Consequently, yields
compressed by an average of c.3bps across the benchmark bond curve.
We expect
a quiet market in tomorrow's session, as investors look towards the outcome of
the MPC meeting.
Benchmark FGN Bonds |
||||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
|
14.50 15-Jul-21 |
7.91 |
6.12 |
(0.46) |
|
16.39 27-Jan-22 |
9.14 |
6.72 |
(1.17) |
|
12.75 27-Apr-23 |
11.37 |
10.68 |
0.57 |
|
14.20 14-Mar-24 |
13.20 |
10.99 |
0.63 |
|
13.53 23-Mar-25 |
12.84 |
11.16 |
0.14 |
|
12.50 22-Jan-26 |
12.99 |
12.49 |
(0.25) |
|
16.29 17-Mar-27 |
13.21 |
12.63 |
(0.28) |
|
13.98 23-Feb-28 |
13.21 |
12.68 |
0.26 |
|
14.55 26-Apr-29 |
13.21 |
12.70 |
(0.55) |
|
12.15 18-Jul-34 |
13.21 |
12.45 |
0.13 |
|
12.40 18-Mar-36 |
13.21 |
12.33 |
0.36 |
|
16.2499 18-Apr-37 |
13.21 |
12.76 |
0.33 |
|
14.80 26-Apr-49 |
13.30 |
12.88 |
(0.15) |
|
Treasury Bills
The
Treasury Bills market traded on an active note, as the new week opened with
renewed demand pressure on OMO bills. The mid-(Sept/Oct) to long-end had the
most axes, with market players swamping at any available market offers, as
CBN's No sale of last week's OMO, constituted to the excess liquidity at the disposal of most players.
At the tail-end of market, we saw supply dry up from both offshore investors
and locals, as demand pressure heightened, especially on Feb/Mar OMO bills. Yields
compressed by an average of c.105bps across the benchmark OMO curve.
Similarly,
the NTB side recovered in today's session, as we saw buy-interest in short- to
mid-tenured NTBs, as banks looked to fill-in client orders. Yields dropped by
an average of c.317bps across the benchmark NTB curve.
We expect
to see more demand across the OMO curve, as market players look to reinvest
excess funds.
Benchmark
OMO Bills |
|||
Description |
Bid (%) |
Offer
(%) |
Day
Change (%) |
NGOMO 2-Apr-20 |
17.00 |
15.50 |
(1.00) |
NGOMO 14-May-20 |
17.00 |
13.00 |
(1.00) |
NGOMO 4-Jun-20 |
17.00 |
13.00 |
(1.00) |
NGOMO 2-Jul-20 |
17.00 |
13.00 |
(1.00) |
NGOMO 13-Aug-20 |
17.00 |
13.00 |
(1.00) |
NGOMO 3-Sep-20 |
17.00 |
13.00 |
(1.00) |
NGOMO 1-Oct-20 |
16.50 |
13.25 |
(1.50) |
NGOMO 3-Nov-20 |
17.00 |
13.25 |
(1.00) |
NGOMO 1-Dec-20 |
17.00 |
13.25 |
(1.00) |
NGOMO 5-Jan-21 |
17.00 |
13.00 |
(1.00) |
NGOMO 02-Feb-21 |
17.00 |
13.00 |
(1.00) |
Benchmark
NTBills |
|||
Description |
Bid (%) |
Offer
(%) |
Day
Change (%) |
NIGTB 2-Apr-20 |
3.50 |
1.00 |
(5.50) |
NIGTB 2-Jul-20 |
4.50 |
1.00 |
(4.50) |
NIGTB 1-Oct-20 |
6.00 |
1.00 |
(3.00) |
NIGTB 12-Nov-20 |
7.00 |
2.00 |
(2.00) |
NIGTB 14-Jan-21 |
7.00 |
3.00 |
(2.00) |
NIGTB 11-Feb-21 |
7.00 |
2.00 |
(2.00) |
Money Market
System
liquidity opened with c.N371bn positive, as interbank rates still opened
slightly higher due to FX wholesale debit. OBB and OVN rates rose by c.140bps
to close at 6.00% and 6.93% respectively.
We expect
rates to remain depressed as system liquidity remains buoyant and no
significant funding by banks.
Money Market Rates |
||
|
Current (%) |
Previous (%) |
Open Buy Back
(OBB) |
6.00 |
4.80 |
Overnight (O/N) |
6.93 |
5.30 |
FX Market
With last week's exchange rate adjustment by the CBN across
the different market segments, the Naira/USD spot and SMIS rates reflected the
change to close at N360.00/$ and N358.51/$ respectively. At the I&E FX
window, the Naira dipped against the greenback by N8.75k to close at N380.75/$.
At the parallel market, cash and transfer rates depreciated
by N20 and N10 to close at N396.00/$, and N410.00/$.
FX Market |
||
Current (N/$) |
Previous ( N/$) |
|
CBN Spot |
360.00 |
307.00 |
CBN SMIS |
358.51 |
358.51 |
I&E FX
Window |
380.75 |
372.00 |
Cash Market |
396.00 |
376.00 |
Transfer Market |
410.00 |
400.00 |
Eurobond
The NGERIA Sovereign started the week on an active
note, as yields retraced across the sovereign yield curve. As investors
continue to trade oil price sentiment, we saw a sharp drop in oil prices, as it
stands at $27.96 per barrel. Yields expanded by c.39bps across the sovereign
curve.
Similarly, the NGERIA Corps tickers traded on a bearish note, as yields weakened
among most tracked papers. Yields on the ACCESS 2021s and FIDBAN 2022s spiked
by c.494bps and c.470bps respectively.
Related News
1.
DANGCEM Notifies
of Intention To Issue Maiden Bonds
2.
Average NT-Bills
Yield Rises to 4.0% Amidst Mixed Investors' Sentiments; UCAP Plc CP Available
3.
CBN Responds to
Global Economic Conditions; Depreciates Naira
4.
Yields Continue
to Recover, as the CBN Records a NO SALE at the OMO Auction
5.
Rates At T-Bills
Primary Auction Closes Lower, Despite Low Crude Oil Prices
6.
Invest in FGN
Monthly Bond Auction - March 2020
7.
Yields Continue
to Rally in the Bonds Market as February Inflation Rate Rises to 12.20%
8.
Treasury Bill
Auction Holds On Wednesday March 18th, 2020
9.
Bond Coupon
Payment of c.N140bn Sparks a Slight Recovery in the Bonds Market
10. Average Yield
Dips Marginally to 3.9% Amidst Oil Price Decline