| Bonds & Fixed Income |    793 VIEWS  |
| Bonds & Fixed Income | |
| 793 VIEWS | |
 |
Tuesday, January 19, 2021 / 7:40 AM / Zedcrest Capital / Header Image Credit: Knowledge Wharton
Below
are highlights of trading activities in the fixed income and forex market on
January 18, 2021
FGN Bonds
The FGN bond
market kicked off the new week on a sluggish note, with light trading volumes
consummated in the market despite bond coupon inflows hitting the system. Bond
maturities, especially at the curve's belly, remained aggressively offered throughout
the day with very few bids to match. However, towards the close of business,
activities picked up slightly on the 2028s and 2029s bond, which traded within
the range of 7.85%-8.00%. Consequently, yields expanded by c.4bps on the
average across the benchmark bond curve.
We expect
the market to remain sluggish tomorrow as institutional investors queue up
their demand towards the monthly FGN Bond auction scheduled to hold on
Wednesday.
|
Benchmark FGN Bonds |
||||
|
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
|
|
16.39
27-Jan-22 |
4.00 |
1.55 |
1.12 |
|
|
12.75
27-Apr-23 |
5.47 |
2.94 |
(0.01) |
|
|
14.20
14-Mar-24 |
6.21 |
3.82 |
(0.01) |
|
|
13.53
23-Mar-25 |
7.56 |
4.50 |
0.00 |
|
|
12.50
22-Jan-26 |
8.06 |
6.20 |
0.00 |
|
|
16.29
17-Mar-27 |
8.62 |
6.34 |
0.00 |
|
|
13.98
23-Feb-28 |
8.30 |
7.40 |
0.00 |
|
|
14.55 26-Apr-29 |
8.55 |
7.50 |
0.21 |
|
|
12.15
18-Jul-34 |
9.15 |
8.75 |
0.00 |
|
|
12.50
27-Mar-35 |
9.18 |
8.58 |
(0.33) |
|
|
12.40
18-Mar-36 |
9.18 |
8.60 |
(0.38) |
|
|
16.2499
18-Apr-37 |
9.10 |
8.75 |
0.00 |
|
|
9.80
24-Jul-45 |
9.59 |
7.18 |
0.00 |
|
|
14.80
26-Apr-49 |
10.23 |
8.85 |
0.00 |
|
|
12.98
27-Mar-50 |
10.26 |
8.75 |
0.00 |
|
Treasury Bills
The
Treasury bills market started the week on a tepid note as market participants
continue to shy away from the market due to the unattractive yields. Offshore
players remained firm sellers of OMO T-bills throughout the trading session as
they seek to position for another OMO auction expected to hold later this week.
We saw a few trades executed on the January 2021 bills at 2.50%; however, this
was not enough to lift the market mood. The NTB space was also quiet, although
we saw few order-driven demands for the new 1yr issue, with trades executed
around 0.80%.
We
expect trading activities to improve slightly as inflows from tomorrow's OMO
maturities (N226.31BN) should support T-bills' market appetite.
|
Benchmark OMO Bills |
|||
|
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
|
NGOMOB 0
02/02/21 |
8.00 |
0.02 |
0.00 |
|
NGOMOB 0
03/02/21 |
8.00 |
0.02 |
0.00 |
|
NGOMOB 0
05/11/21 |
8.00 |
0.03 |
0.00 |
|
NGOMOB 0
06/08/21 |
8.00 |
0.03 |
0.00 |
|
NGOMOB 0
08/10/21 |
8.00 |
0.03 |
0.00 |
|
NGOMOB 0
09/07/21 |
8.00 |
0.03 |
0.00 |
|
NGOMOB 0
10/19/21 |
8.00 |
0.05 |
0.00 |
|
NGOMOB 0
11/02/21 |
8.00 |
0.05 |
0.00 |
|
NGOMOB 0
12/07/21 |
8.00 |
0.05 |
0.00 |
|
Benchmark NTBills |
|||
|
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
|
NIGTB 0
01/14/21 |
8.00 |
0.02 |
0.00 |
|
NIGTB 0
02/11/21 |
8.00 |
0.02 |
0.00 |
|
NIGTB 0
03/11/21 |
8.00 |
0.03 |
0.00 |
|
NIGTB 0
04/29/21 |
8.00 |
0.03 |
0.00 |
|
NIGTB 0
05/13/21 |
8.00 |
0.03 |
0.00 |
|
NIGTB 0
06/10/21 |
8.00 |
0.03 |
0.00 |
|
NIGTB 0
07/01/21 |
8.00 |
0.03 |
0.00 |
|
NIGTB 0
08/26/21 |
8.00 |
0.03 |
0.00 |
|
NIGTB 0
09/09/21 |
8.00 |
0.05 |
0.00 |
|
NIGTB 0 10/14/21 |
8.00 |
0.05 |
0.00 |
|
NIGTB 0 11/11/21 |
8.00 |
0.05 |
0.00 |
|
NIGTB 0
01/14/21 |
8.00 |
0.02 |
0.00 |
|
NIGTB 0
02/11/21 |
8.00 |
0.02 |
0.00 |
Money Markets
Interest
rates remained depressed (trading sub 1%) as the Money Market remained flush
with cash. System liquidity opened the day at c. N374.62bn positive, buoyed by
the 2034 bond coupon inflows of c. N66bn hitting the system.
We expect
funding rates to drop further tomorrow as inflows from OMO T-bills maturity of
N226.31Bn are expected to boost market liquidity.
|
Money Market Rates |
||
|
|
Current (%) |
Previous (%) |
|
Open Buy Back (OBB) |
0.50 |
0.50 |
|
Overnight (O/N) |
0.83 |
1.00 |
FX Market
The I&E FX Market started the week on a positive note, supported by
inflows from exporters, which was duly matched with outstanding demand.
Consequently, rates strengthen slightly by N0.84k (0.21%) to close at N393.89/$
with trading volumes improving by 71% D/D at the window.
Parallel market rates continued to
weaken as the Naira depreciated by N1.50k (0.32%) against the greenback to
close at N474.00/$ in the cash market. In contrast, the transfer rate held
steady, closing at N485.00/$ for another consecutive trading session.
|
FX Market |
||
|
Current (N/$) |
Previous (N/$) |
|
|
CBN Spot |
379.00 |
379.00 |
|
CBN SMIS |
380.69 |
380.69 |
|
I&E FX Window |
393.83 |
394.67 |
|
Cash Market |
474.00 |
472.50 |
|
Transfer Market |
485.00 |
485.00 |
Eurobonds
Trading activities in the SSA Eurobond space today
was muted mainly as most participants remained on the sidelines due to the U.S.
market closure for MLK Day. For the NIGERIA Sovereigns, the 2032 bond was the
major loser today (+10bps) D/D, while the sovereign curve expanded by an
average of c.5bps. In a similar vein in the SSA space, yields on both the
ANGOLA and GHANA bond curves closed lower by -c.2bps on the average.
We also witnessed a slow trading session in the
NIGERIA Corps space, with yields expanding slightly on most tracked papers
except on the ACCESS 2021s, which compressed by -c.2bps.
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