Bond Yields Trade Flat as Market Players Await Q3 Calendar Release

Proshare

Wednesday, July 10, 2019   /  08:00AM  /  Zedcrest Capital

 

The FGN Bond market traded on a relatively flat note, with yields marginally higher by c.3bps on the day. Interests shifted to the long end of the curve, where investors showed renewed interest for the 30year bond, which currently boasts the highest yield on offer (14.40%) among the FGNs. A slowdown in demand interest on the short end however tilted yields marginally upwards on average.

 

Below are highlights from activities in the fixed income and forex market on July 09, 2019. 

 

Bonds

Yield were marginally higher in the bonds market, and we expect it to remain relatively stable in the near term, as market players anticipate release of the Q3 FGN Bond calendar by the DMO.

 

Benchmark FGN Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

14.50 15-Jul-21

13.91

13.13

0.12

16.39 27-Jan-22

13.86

13.26

0.25

12.75 27-Apr-23

13.99

13.86

0.00

14.20 14-Mar-24

14.00

13.67

0.00

13.53 23-Mar-25

14.02

13.84

(0.02)

12.50 22-Jan-26

14.33

14.05

(0.02)

16.29 17-Mar-27

14.16

14.10

(0.04)

13.98 23-Feb-28

14.29

14.17

0.08

12.15 18-Jul-34

14.46

14.28

0.04

12.40 18-Mar-36

14.39

14.24

0.02

16.2499 18-Apr-37

14.39

14.23

0.03

14.80 26-Apr-49

14.45

14.37

(0.05)


Source: Zedcrest Dealing Desk 


Treasury Bills 

The T-bills market traded on a slightly bullish note, with some demand pressures observed on the mid to long end of the curve, due to the significantly buoyant system liquidity levels and continued lack of an OMO auction by the CBN. Yields were consequently lower by c.5bps on average. 

We expect demand interest to persist in the near term, as market players remain uncertain of an OMO auction, which may likely occur on Thursday, with c.N92bn in OMO maturities expected then.


Benchmark Treasury Bills

Description

Bid (%)

Offer (%)

Day Change (%)

18-Jul-19

10.50

6.00

0.00

1-Aug-19

10.00

6.00

0.00

12-Sep-19

11.50

10.50

0.20

3-Oct-19

11.00

10.00

0.00

14-Nov-19

11.70

11.10

0.30

5-Dec-19

11.80

11.10

0.00

2-Jan-20

11.75

11.35

0.00

6-Feb-20

11.65

11.45

(0.35)

19-Mar-20

11.90

11.55

(0.05)

2-Apr-20

11.90

11.60

(0.10)

14-May-20

11.85

11.55

(0.05)

04-Jun-20

11.90

11.60

(0.10)




Money Market 

Rates in the money market remained stable, as there were no significant outflows from the system. The OBB and OVN rates consequently ended the session at 3.29% and 3.93%, with system liquidity closing the session at c.N530bn positive.

 

We expect rates to remain stable in the near term, as there are no significant outflows anticipated.



Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

3.29

3.36

Overnight (O/N)

3.93

4.07

Source: FMDQ, Zedcrest 

 

FX Market

At the interbank, the Naira/USD rate remained stable at N307.00/$ (spot) and N357.52/$ (SMIS). The NAFEX rate at the I&E window declined by 28k to N360.61/$, while the cash and transfer rates at the parallel market remained stable at N358.50/$ and N362.50/$ respectively.

 

FX Market

 

Current (N/$)

Previous ( N/$)

CBN Spot

307.00

307.00

CBN SMIS

357.72

357.52

I&E FX Window

360.61

360.89

Cash Market

358.50

358.50

Transfer Market

362.50

362.50

Source: CBN, FMDQ, REXEL BDC


Eurobonds

The NGERIA Sovereigns dipped further as stronger US job gains dampened sentiments for a rate cut by the US Fed. Yields were consequently higher by c.9bps on the day. 

Demand interests remained robust on the NGERIA Corps, with renewed demand lifting prices higher in the FIDBAN 22s. 


Proshare Nigeria Pvt. Ltd.


 Proshare Nigeria Pvt. Ltd. 

 

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