Bonds & Fixed Income | |
Bonds & Fixed Income | |
910 VIEWS | |
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Wednesday, May 27, 2020 / 9:22 PM / Zedcrest Capital / Header Image Credit: Ceditalk
The Bond Market resumed the short week on a very languid note.
Offers were shown on most of the benchmark papers at the head and the tail of
the curve while the auctions papers, especially 2050s which continued to garner
strength settling around 12.55% levels. The belly of the curve witnessed a
short squeeze, especially for the 2027s and 2028s maturities, which were mostly
bided for a greater part of the trading session. Consequently, yields
compressed by an average of c.2bps across the benchmark bond curve by market closing.
We expect to see improved demand from local investors in the
market tomorrow, mainly supported by improved system liquidity from OMO
maturity credits.
Benchmark FGN Bonds |
||||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
|
14.50 15-Jul-21 |
7.87 |
4.69 |
(0.01) |
|
16.39 27-Jan-22 |
9.08 |
5.24 |
(0.01) |
|
12.75 27-Apr-23 |
9.34 |
8.74 |
0.15
|
|
14.20 14-Mar-24 |
9.40 |
8.39 |
0.00 |
|
13.53 23-Mar-25 |
9.32 |
8.62 |
0.00 |
|
12.50 22-Jan-26 |
10.58 |
10.01 |
0.00 |
|
16.29 17-Mar-27 |
10.97 |
10.08 |
0.00 |
|
13.98 23-Feb-28 |
11.04 |
10.34 |
0.00 |
|
14.55 26-Apr-29 |
11.21 |
10.66 |
(0.16) |
|
12.15 18-Jul-34 |
11.56 |
11.22 |
(0.14) |
|
12.40 18-Mar-36 |
11.69 |
11.29 |
(0.03) |
|
16.2499 18-Apr-37 |
11.61 |
11.24 |
(0.11) |
|
14.80 26-Apr-49 |
12.70 |
12.33 |
0.00 |
|
Treasury
Bills
The
treasury bills market was mainly bearish all day triggered by market liquidity
squeeze witnessed in the interbank space. The market was offered on almost all
OMO papers but most profound at the short and mid-dated papers (July to December),
with the December maturities offered around 6.40% as rates expanded further by
c.18bps across the OMO curve at the close of trading.
The NTB side traded on a quiet note, as market participants
continue to show better offers on 31 May maturity at 3.40%, while all other
maturities stayed muted for most of the trading session. Rates expanded at an
average of c.20bps across the NTB curve. At the Primary Market Auction, the DMO
sold a total of N59.37bn across the three maturities on offer, with rates
dropping slightly for the 91 and 182 days' maturities while 364days closed
about c.18bps higher than the last auction's close.
We expect improved demand in NTBs in tomorrow's session, as
local investors look to fill-in lost bids at today's Primary Market Auction,
further supported by inflows from OMO maturities.
Primary Market Auction Results |
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NTB - 27 May 2020 |
|||||||||
Tenor |
Rate (%) |
Offer (₦'bn) |
Sub (₦'bn) |
Sale (₦'bn) |
Previous Rate (%) |
Changes |
|||
91-days |
2.4500 |
20.37 |
37.46 |
20.37 |
2.5000 |
(0.0500) |
|||
182-days |
2.7200 |
19.16 |
55.15 |
19.16 |
2.8500 |
(0.1300) |
|||
364-days |
4.0199 |
19.84 |
37.95 |
19.84 |
3.8400 |
0.1799 |
|||
Benchmark OMO Bills |
|
||||||||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
|
|||||
NGOM 6/4/2020
|
7.00 |
3.50 |
0.50
|
|
|||||
NGOM 7/2/2020
|
7.50 |
3.50 |
0.25
|
|
|||||
NGOM
8/13/2020 |
7.25 |
4.75 |
0.25
|
|
|||||
NGOM 9/3/2020
|
7.25 |
5.20 |
0.25
|
|
|||||
NGOM
10/1/2020 |
8.50 |
6.25 |
0.25
|
|
|||||
NGOM
11/03/2020 |
8.50 |
6.00 |
0.25
|
|
|||||
NGOM
12/01/2020 |
9.00 |
6.00 |
0.00 |
|
|||||
NGOM
01/05/2021 |
9.00 |
7.00 |
0.00 |
|
|||||
NGOM
02/02/2021 |
10.00 |
7.00 |
0.00 |
|
|||||
NGOM 03/02/21 |
10.00 |
7.00 |
0.00 |
|
|||||
Benchmark NTBills |
|
||||||||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
|
|||||
NIGTB 2-Jul-20 |
4.00 |
0.10 |
0.00 |
|
|||||
NIGTB 1-Oct-20 |
5.25 |
0.20 |
0.25
|
|
|||||
NIGTB 12-Nov-20 |
5.50 |
0.20 |
0.50
|
|
|||||
NIGTB 14-Jan-21 |
5.25 |
0.50 |
0.25
|
|
|||||
NIGTB 11-Feb-21 |
5.00 |
0.50 |
0.00 |
|
|||||
Money
Markets
Interbank
rates stayed on the double-digits levels in the new week, dropping slightly by
c.3bps (15.63%) on the OVN while the OBB remained at 15.00% levels. System Liquidity
opened and stayed very low with estimated figures of c.N36BN by the close of
the day.
We
expect interbank rates to adjust into single-digits following OMO maturities
credit to the interbank market tomorrow.
Money Market Rates |
||
|
Current (%) |
Previous (%) |
Open Buy Back (OBB) |
15.00 |
15.00 |
Overnight (O/N) |
15.60 |
15.63 |
FX
Market
The liquidity squeeze persisted in the I&E FX window this week as banks remained largely bided with few trades concluded by market participants, as rates remained unchanged compared to last week's closing.
While
most of the FX market segments also remained unchanged, we saw the Naira
appreciate in the cash and transfer market by an average of N2.50k to close at N458/$
and N467/$ respectively.
FX Market |
||
Current (N/$) |
Previous ( N/$) |
|
CBN Spot |
361.00 |
361.00 |
CBN SMIS |
380.69 |
380.69 |
I&E FX Window |
385.94 |
385.94 |
Cash Market |
458.00 |
460.00 |
Transfer Market |
467.00 |
470.00 |
Eurobonds
The NGERIA Sovereign tickers traded on a quiet note, although the market remained largely
bullish across the curve as offers worsened across the curve. Yields compressed
at an average of c.22bps, with gainers seen across the sovereign curve.
The NGERIA Corps tickers also traded on a very quiet note while we saw little activity on
ACCESS 21 and ETINL 2024s. The market got hazy for these papers, as quotes
seemed disjointed by participants. Most of the tracked papers weakened at the
close of the session.
1.
Anchoria Fixed
Income Monitor: Bond Auction worth N60bn mops System Liquidity
2.
Average Yield on
NT-Bills Declines 11bps WoW, PMA Holds Today
3.
UCAP Raises
N10bn in Series 1 Bond Issuance
4.
MTNN Notifies of
Proposed Series I and II Commercial Paper Issuance Of Up to N50bn
5.
Drab Trading
Activity As The Markets Reacted To Low System Liquidity
6.
A Highly
Successful Auction for the DMO in May 2020
7.
Rising Inflation
And Impending Sukuk Supply Weigh On Bond Trading Activity
8.
Summary of FGN
Bond Auction Results For May 2020
9.
DMO Comfortably
Raises N390.70Bn At The FGN Bond Auction As Local Demand Swells
10.
CBN Resumes
Whole FX Intervention To Tackle FX Supply Problems