Bonds & Fixed Income | |
Bonds & Fixed Income | |
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Friday, September 06,
2019 / 07:18PM / By Zedcrest Capital / Header Image Credit: Business Trumpet
Improved demand interests flowed in the Treasury Bills secondary market in today's session as, contrary to market expectations, there was no OMO auction floated by the CBN.
Below are highlights of trading acivities in the
fixed income and forex market today.
Bonds
The FGN Bond market closed the week with sustained demand pressures across the curve. Yields compressed further by c.7bps on the average across the FGN Bond Benchmark curve, most notably at the short- to mid-end maturities.
We expect to see sustained demand at the mid-end
of the curve, as clients' preference for duration seem to peak at the 10-year
benchmark.
Benchmark FGN Bonds |
|||
Description |
Bid (%) |
Offer (%) |
Day Change(%) |
14.50 15-Jul-21 |
14.15 |
13.68 |
(0.32) |
16.39 27-Jan-22 |
14.47 |
14.07 |
(0.05) |
12.75 27-Apr-23 |
14.40 |
14.24 |
(0.16) |
14.20 14-Mar-24 |
14.35 |
13.98 |
0.00 |
13.53 23-Mar-25 |
14.33 |
13.84 |
0.00 |
12.50 22-Jan-26 |
14.36 |
14.15 |
(0.05) |
16.29 17-Mar-27 |
14.26 |
14.13 |
(0.02) |
13.98 23-Feb-28 |
14.26 |
14.14 |
(0.03) |
12.15 18-Jul-34 |
14.61 |
14.40 |
(0.04) |
12.40 18-Mar-36 |
14.61 |
14.40 |
(0.06) |
16.2499 18-Apr-37 |
14.65 |
14.40 |
(0.02) |
14.80 26-Apr-49 |
14.61 |
14.50 |
(0.06) |
Source:
Zedcrest Dealing Desk
Treasury Bills
Yields in the NTBills Benchmark Curve compressed by c.9bps, especially at the long-end, supported by buoyant system liquidity.
We expect the market to trade cautiously next
week, as participants consider the possibility of further rate hikes at PMA and
OMO auctions expected later in the week.
Benchmark Treasury Bills |
|||
Description |
Bid (%) |
Offer (%) |
Day Change
(%) |
12-Sep-19 |
12.85 |
11.90 |
(0.15) |
3-Oct-19 |
12.80 |
12.00 |
0.00 |
14-Nov-19 |
13.00 |
12.00 |
0.00 |
5-Dec-19 |
13.00 |
12.20 |
0.00 |
2-Jan-20 |
13.30 |
12.50 |
0.00 |
6-Feb-20 |
13.00 |
12.50 |
(0.20) |
19-Mar-20 |
13.00 |
12.50 |
0.00 |
2-Apr-20 |
13.30 |
12.85 |
0.15 |
14-May-20 |
13.50 |
13.00 |
0.00 |
04-Jun-20 |
13.50 |
13.20 |
(0.50) |
02-Jul-20 |
13.65 |
13.15 |
(0.35) |
13-Aug-20 |
13.55 |
13.30 |
(0.05) |
Source: Zedcrest Dealing Desk
Money Market
Rates in the money market dropped by an average of c.110 bps supported by buoyant system liquidity. The OBB and OVN rates ended the week at 3.21% and 3.86% respectively, as system liquidity remained well in positive territory at c.N692bn.
Despite funding pressures from
Wholesale and Retail FX funding next week, we expect rates to remain stable at
low levels in light of high system liquidity levels and expected OMO maturities
of at least c.N348bn.
Money Market Rates |
||
|
Current (%) |
Previous
(%) |
Open Buy Back (OBB) |
3.21 |
4.21 |
Overnight (O/N) |
3.86 |
5.14 |
Source: FMDQ, Zedcrest
FX Market
At the interbank, the Naira/USD spot
and SMIS rates remained stable at N306.90/$ and N358.04/$. The Naira
appreciated at the I&E window by 11k to close at N362.08/$. At the parallel
market, the cash and transfer rates remained stable at N357.70/$ and N362.50/$
respectively.
FX Market |
||
|
Current
(N/$) |
Previous
(N/$) |
CBN Spot |
306.90 |
306.90 |
CBN SMIS |
358.04 |
358.04 |
I&E FX Window |
362.08 |
362.19 |
Cash Market |
357.70 |
357.70 |
Transfer Market |
362.50 |
362.50 |
Source: CBN, FMDQ, REXEL BDC
Eurobonds
The NGERIA Sovereigns continued their losing streak, weakening further by c.3bps across the curve. Volatility in global oil prices from escalating trade sentiments saw the markets close the week softer.
The NGERIA corps traded on a
muted note, with slightly improved bids witnessed across the tracked tickers.
We witnessed some buy interest on the FIDABN 22s and ETINL 24s.
Related News
1. What is Driving
Early Eurobond Redemption by the Banks?
2. Nigerian
Eurobonds Weaken as Trade war Depresses Oil Prices
3. Treasury Market
Opens Bearish as Market Players React to Higher CBN OMO Rate
4. Bearish
Sentiments Halt as Improved Demand from Local Investors Pushes Average Yield Down
to 13.8%
5. Fixed Income
Monitor - A Positive Sentiment Returns In The Market
6. September 2019
FGN Savings Bonds Offer for Subscription
7. Bond Yields
Trend Higher as CBN Floats Further OMO Auction
8. NTB Auction
Oversubscribed by 67%, as Stop Rates Clear 80bps Higher
9. Treasury Bill
Auction Schedule For August 28th, 2019
10. Average Money
Market Rate Dropped Marginally By 0.53% To Settle At 18.25% From 18.79%
11. Bearish Momentum
Sustained as Average T-Bills Yield Advanced 130bps to 15.2%
12. Total
Subscription For August 2019 FGN Bond Auction Put At N64.71bn
13. Escalating Trade
Tensions to Weigh on Domestic Fixed Income Yields
14. Summary of FGN Bond Auction Results For August 2019