Bonds & Fixed Income | |
Bonds & Fixed Income | |
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Thursday, June 11 2020 / 09:50 AM / Zedcrest Capital / Header Image Credit: Business Finance
Below are highlights of trading activities in the fixed income and forex market on June 11, 2020
Trading activities
picked slightly in the bond spaces as we witnessed decent transaction levels on
selected bonds. The 2050s was the paper of interest with participants lifting
axes around 12.20% since it was offered slightly better than the 2049s paper.
We also saw few interest in 2023s and 2027s albeit not so strong since
participants were clearly cherry-picking on the few bonds with better axes than
screen offer. At the end of the day, although yields didn't quite move in the
same direction for most of the benchmark papers, it slightly expanded by an
average of c.1bps on the benchmark curve.
Since the market
does not expect and maturities/inflow in the interbank market tomorrow, we
expect the bonds market to close the week on rather weak note.
Benchmark FGN Bonds |
||||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
|
14.50 15-Jul-21 |
6.70 |
4.00 |
(0.07) |
|
16.39 27-Jan-22 |
7.66 |
4.68 |
(0.05) |
|
12.75 27-Apr-23 |
9.10 |
8.35 |
0.06
|
|
14.20 14-Mar-24 |
9.06 |
8.25 |
(0.01) |
|
13.53 23-Mar-25 |
8.58 |
7.45 |
0.22
|
|
12.50 22-Jan-26 |
9.78 |
9.34 |
0.11
|
|
16.29 17-Mar-27 |
10.55 |
10.05 |
(0.31) |
|
13.98 23-Feb-28 |
10.50 |
9.99 |
(0.01) |
|
14.55 26-Apr-29 |
10.72 |
10.38 |
(0.08) |
|
12.15 18-Jul-34 |
11.49 |
11.04 |
0.14
|
|
12.40 18-Mar-36 |
11.30 |
11.04 |
(0.06) |
|
16.2499 18-Apr-37 |
11.34 |
11.08 |
0.09
|
|
14.80 26-Apr-49 |
12.29 |
12.12 |
0.03
|
|
Treasury
Bills
The
Treasury Bills market opened the day on a one-way note as the bears flooded the
market with offers across the benchmark curve, however by mid-day buying
interest picked for specific February maturities 02nd and 16th
February bills but more love for the 16th February maturity which
offered better than its pairs at 5.65% level. Most of the OMO bills were
offered at better levels compared to yesterday thus causing yields to expand by
average of c.33bps across the benchmark OMO curve.
The
NTB side traded flat, with local investors shifting their attention to the
Primary Market Auction.
At
the PMA, the DMO rolled over a total of c. N90.94bn across three tenors same as
the amount on offer although by redistributing their allotment on the three
tenors on offer. Stop rates closed lower on the 91days and 182 days' paper by
an average of c.49bps while the 364 days' barely changed compared to the
previous auction rates. Demand remained skewed towards the long end, with a
bid-to-cover ratio of 1.46X at the 1-year tenor.
We
expect improved demand for NTBs papers in tomorrow's trading session, as local
investors look to fill-in lost bids from today's Primary Market Auction.
Primary Market
Auction Results |
||||||
NTB - 10 June 2020 |
||||||
Tenor |
Rate (%) |
Offer (₦'bn) |
Sub (₦'bn) |
Sale (₦'bn) |
Previous Rate (%) |
Changes |
91 days |
2.00 |
1.80 |
21.68 |
4.41 |
2.4500 |
-0.4500 |
182 days |
2.20 |
4.50 |
40.29 |
7.82 |
2.7200 |
-0.5200 |
364 days |
4.02 |
84.64 |
114.97 |
78.71 |
4.0199 |
0.0001 |
Benchmark OMO Bills |
|||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
NGOM 6/4/2020
|
4.00 |
0.10 |
0.00 |
NGOM 7/2/2020
|
6.00 |
1.50 |
0.00 |
NGOM
8/13/2020 |
6.00 |
1.50 |
0.00 |
NGOM 9/3/2020
|
6.50 |
1.50 |
0.50
|
NGOM
10/1/2020 |
7.00 |
1.50 |
1.00
|
NGOM
11/03/2020 |
7.00 |
1.50 |
1.00
|
NGOM
12/01/2020 |
7.00 |
1.50 |
1.00
|
NGOM
01/05/2021 |
7.00 |
1.50 |
1.00
|
NGOM
02/02/2021 |
5.90 |
1.50 |
(0.15) |
NGOM 03/02/21 |
5.95 |
1.50 |
(0.10) |
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 |
5.00 |
0.10 |
0.00 |
NIGTB 11-Feb-21 |
5.00 |
0.15 |
0.00 |
Money
Markets
Interbank
rates dropped slightly although system liquidity remain frail opening the day at
c.160.23BN positive. Rates dropped by an average of c.146bps with OBB and OVN
closing at 13.00% and 14.00% respectively.
We
expect a further drop in rates tomorrow but not necessarily to single digits' corridor since we don't expect any major inflow in the interbank market to
support interbank market activities.
Money Market Rates |
||
|
Current (%) |
Previous (%) |
Open Buy Back (OBB) |
13.00 |
14.50 |
Overnight (O/N) |
14.00 |
15.42 |
FX Market
Transaction
volume increased by almost 98% D/D as a total of c.$62.28m passed through the I
&E FX window causing rate to drop slightly 0.04% although most bank remained
bided between 383/$ and 387/$. However, all other markets rate remained
unchanged by the close of the day.
FX Market |
||
Current (N/$) |
Previous ( N/$) |
|
CBN Spot |
361.00 |
361.00 |
CBN SMIS |
380.69 |
380.69 |
I&E FX Window |
386.94 |
387.08 |
Cash Market |
447.00 |
447.00 |
Transfer Market |
453.00 |
453.00 |
Eurobonds
The
NGERIA Sovereign tickers opened flat, with very low trades passing
through the Nigeria space. However, we saw a bit of interest for short dated
papers 21s and 23s in particular causing yields to compress slightly by an
average c.7bps across the sovereign yield curve.
The
NGERIA Corps tickers also traded on a weak note although yields remained
unchanged D/D for most of the tracked papers.
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