Bonds & Fixed Income | |
Bonds & Fixed Income | |
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Friday, August 09, 2019 / 07:00 AM / By Zedcrest Capital / Header Image Credit: Nairabarter
The T-bills market traded on a significantly bearish note, as yields spiked by c.70bps, following renewed selloffs by offshore investors across the curve. Local market players also remained risk off following the renewed OMO issuance by the CBN in the previous session. Bid yields across most of the curve are now at the c.12.00% mark from c.11.50% in the previous session.
Below are highlights of trading
activities in the fixed income and forex market today.
Bonds
The FGN Bond market
traded on a relatively calm note, as there was no further OMO issuance by the
CBN in the money market. Yields consequently compressed slightly on the short
to mid end of the curve. We however continued to witness some selling interests
push yields marginally higher on the longer duration bonds.
We expect yields to
close the week on a relatively calm note, having been already significantly
beaten in the week to date. This is however barring a renewed OMO issuance by
the CBN which could elevate short term bond yields.
Treasury
Bills
We experienced a
bearish trend in the T-bills market today.
We expect yields in the T-bills market to remain slightly pressured in the near term, due to continued selloffs by offshores and the relatively tighter system liquidity levels occasioned by the CBN’s continued FX interventions in the I&E market.
Money Market
Rates in the money
market inched higher by c.4pct, despite the c.N109bn inflows from maturing OMO
bills. This was majorly due to a decline in system liquidity from the continued
FX interventions by the CBN. The OBB and OVN rates consequently ended the
session at 11.43% and 12.57%, with system liquidity currently estimated at
c.N60bn long.
We expect rates to
remain at current double digit levels, due to the relatively tighter system
liquidity levels.
Money
Market Rates |
||
|
Current
(%) |
Previous
(%) |
Open
Buy Back (OBB) |
11.43 |
9.00 |
Overnight
(O/N) |
12.57 |
9.79 |
Source: FMDQ, Zedcrest
FX Market
At the interbank, the Naira/USD rate
remained unchanged at N360.90/$ (Spot) and N357.68/$ (SMIS). The NAFEX rate at
the I&E window rose by 48k to a 6-month high of N363.31/$ due to continued
profit taking on T-bills by offshore investors. At the parallel market, the
cash and transfer rates remained stable at N357.50/$ and N362.00/$
respectively.
FX
Market |
||
|
Current
(N/$) |
Previous
( N/$) |
CBN
Spot |
306.90 |
306.90 |
CBN
SMIS |
357.68 |
357.68 |
I&E
FX Window |
363.31 |
362.83 |
Cash
Market |
357.50 |
357.50 |
Transfer
Market |
362.00 |
362.00 |
Source: CBN, FMDQ, REXEL BDC
Eurobonds
The NGERIA Sovereigns
remained relatively stable, with slight price gains witnessed on the mid to
long end of the curve.
The NGERIA Corps
were relatively stable, but with slight sell interest still witnessed on the
ETINL 24s (6.19/6.08).
Related
News
1.
Treasury Yields Trend Higher, as CBN Resumes OMO Auction
2.
FMDQ Transits To A Full-fledged Securities Exchange
3.
FGN Bond Yields Tick Higher, As Offshore Investors Resume
Profit Taking
4. Average Yield on T-Bills Instruments Marginally Advances
to 11.2% Amidst Absence of OMO Auctions
5.
August 2019 FGN Savings Bonds Offer for Subscription
6.
Nigerian Eurobonds Dip Following Less Dovish US FED Stance
7.
Bond Yields Moderate Further Amid Continued Local Demand
8.
NAFEX Rate Hits Five Month High on Lower FPI Inflows
9.
Investors Renew Demand for Long Tenured FGN Bonds
10. Bullish Run Halts as Average Yield Advanced 54bps WoW on Tight System Liquidity
11. FMDQ OTC Holds 7th AGM, Achieves 22% Turnover From Trading Activities in 2018 FY