T-Bill Yields Continue Downtrend as Market Players Oversubscribe 1-yr PMA at 16X bid to cover


Wednesday, April 18, 2018 /10:11PM / Zedcrest Capital

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The Bond market remained slightly bullish with continued demand on the long end of the curve (27s - 37s) which compressed further by c.4bps. The outperformers were the 27s, 34s and 37s which recorded new highs, whilst we noticed some profit taking on the 2036s having also hit new highs during the session. The shorter end of the curve were more lackluster with fewer volumes traded during session (nothing on the 19s and 20s). We expect the market to be relatively stable tomorrow, as market players anticipate a resumption in OMO by the CBN.

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Treasury Bills

The T-bills market remained firmly bullish as the market was awash with liquidity at c.N500bn long. Yields consequently fell by c.15bps across the curve. We witnessed significant oversubscription at the PMA conducted today, mostly on the 364-day bill which cleared at 12.08% with a 16X bid to cover. We expect the market to retrace slightly tomorrow on the back of a much anticipated OMO auction by the CBN.


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Money Market

The OBB and OVN rates fell slightly to 1.75% and 2.33% respectively, as system liquidity improved to c.N500bn long due to c.N33bn inflows from bond coupon payments on the 2037 bond. We expect rates to trend higher tomorrow on the back of an anticipated OMO sale by the CBN.


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FX Market

The Interbank rate remained stable at its previous rate of N305.60/$, with the CBN external reserves recorded to have improved by 1.53% to $47.01bn as at 16-April. The NAFEX rate appreciated by 0.09% to N360.16/$, while rates in the Unofficial market remained stable at N361.20/$. 

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The NGERIA Sovereigns were slightly bearish, with some sell especially on the 23s and 47s. We however witnessed slight demand for the 38s which gained +0.50pt.


The NGERIA Corps were fairly bullish with demand especially on the 2022 maturities (Zenith, UBANL and FIDBAN) which gained +0.06pt on average. We however witnessed slight sell on the shorter tenured GRTBNL 18s and ZENITH 19s. The SEPLLN 23s traded higher at 101.05, now trading 101/101.75.



 Proshare Nigeria Pvt. Ltd.


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