Bonds & Fixed Income | |
Bonds & Fixed Income | |
1096 VIEWS | |
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Saturday, July 04, 2020 / 07:47 AM / By Zedcrest Capital / Header Image Credit: Fortune
The bonds market traded on a somber note as
the downward trajectory in yield slowed especially at the tail of the curve
witnessing a bit of resistance from the bulls. We saw few client-driven demands
at the short-end of the curve, the 2023s papers in particular which settled
around 4.85% for most of the transactions sealed. However, most of the other
benchmark papers stayed quiet for a larger part of the trading session with few
volumes consummated while yields compressed slightly by an average of c.2bps
D/D.
We expect market to open on a tepid note next
week as local investors continue to cherry-pick on few bonds offered at levels
betters than market.
Benchmark FGN Bonds |
||||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
|
14.50 15-Jul-21 |
4.38 |
2.99 |
(0.02) |
|
16.39 27-Jan-22 |
4.44 |
3.11 |
(0.02) |
|
12.75 27-Apr-23 |
5.89 |
4.00 |
(0.04) |
|
14.20 14-Mar-24 |
6.07 |
5.27 |
0.13 |
|
13.53 23-Mar-25 |
6.96 |
5.08 |
0.00 |
|
12.50 22-Jan-26 |
7.76 |
6.89 |
0.00 |
|
16.29 17-Mar-27 |
8.60 |
7.89 |
0.00 |
|
13.98 23-Feb-28 |
8.70 |
8.20 |
0.00 |
|
14.55 26-Apr-29 |
8.76 |
8.23 |
(0.27) |
|
12.15 18-Jul-34 |
10.12 |
9.65 |
0.00 |
|
12.40 18-Mar-36 |
10.14 |
9.87 |
0.00 |
|
16.2499 18-Apr-37 |
10.12 |
9.80 |
0.00 |
|
14.80 26-Apr-49 |
10.97 |
10.75 |
0.00 |
|
Treasury Bills
At the OMO space today, we saw attention shifts to the newly issued bill 08th June paper which saw most of the market action at the early hours with trades settling around 5.80% levels. However, by mid-day we saw demand dwindled as CRR debit caused local players to reappraise and reduce their buying's consequently offers were force improve their offers by c.25bps to match the few bids left. We also witness slight interest in the 13th August bill albeit no trade as the bears and bulls stayed far apart making it difficult to match trade.
The NTB space opened and stayed
quiet for most of the trading session with few offers at the belly of the curve
at 1.75% level although we saw slightly improved offers on the shorter-dated
bills albeit in retail sizes.
We expect the markets to open the
new week on a bearish note amidst the squeezed system liquidity.
Benchmark OMO Bills |
|||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
NGOMO 8/13/2020 |
4.00 |
1.20 |
0.00 |
NGOMO 9/3/2020 |
5.50 |
1.20 |
0.50 |
NGOMO 10/1/2020 |
7.00 |
1.20 |
0.50 |
NGOMO 11/03/2020 |
7.00 |
1.20 |
0.25 |
NGOMO 12/01/2020 |
6.70 |
1.20 |
(0.05) |
NGOMO 02/02/2021 |
7.50 |
1.20 |
0.50 |
NGOMOB 0 03/02/21 |
7.50 |
1.20 |
0.50 |
NGOMOB 0 03/02/21 |
7.50 |
1.20 |
0.50 |
NGOMOB 0 05/11/21 |
7.00 |
1.20 |
0.00 |
Benchmark NTBills |
|||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
NIGTB 10/1/2020 |
3.50 |
0.10 |
0.50 |
NIGTB 11/12/2020 |
3.50 |
0.10 |
0.00 |
NIGTB 01/14/2021 |
3.50 |
0.10 |
0.00 |
NIGTB 02/11/2021 |
4.00 |
0.10 |
0.00 |
NIGTB 04/29/2021 |
4.00 |
0.10 |
0.00 |
NIGTB 05/13/21 |
4.00 |
0.10 |
0.00 |
NIGTB 06/10/21 |
4.00 |
0.10 |
0.00 |
Money Markets
Money Market Rates jumped by c.1930bps on the average in today's session as the market reeled from a CRR debit by the Apex Bank. System liquidity opened c.N433Bn positive but this offered no reprieve as banks' pressures funding was further compounded by their inability to access the SLF window on a Retail FX funding day consequently OBB and OVN rates closed the week higher at 21.50% and 23.50% respectively.
We expect rates to remain tight
opening next week but slightly lower since banks have the option of the SLF
window to fund their normal day-to-day needs.
Money Market Rates |
||
|
Current (%) |
Previous (%) |
Open Buy Back (OBB) |
21.50 |
2.80 |
Overnight (O/N) |
23.50 |
3.60 |
FX Market
Most of the FX market segment
remained largely unchanged as market activities continue to dwindle in FX space
due to the shortage in supply. However, we saw the cash market depreciate
slightly by 0.30k closing the day at 458.30/$.
FX Market |
||
Current (N/$) |
Previous ( N/$) |
|
CBN Spot |
361.00 |
361.00 |
CBN SMIS |
380.69 |
380.69 |
I&E FX Window |
386.00 |
386.00 |
Cash Market |
458.30 |
458.00 |
Transfer Market |
461.00 |
461.00 |
Eurobonds
The NGERIA Sovereign tickers traded on
a muted note, as calm was seen through the curve. This lack of activity was
caused by the Independence's Day Holiday witnessed in the U.S. However we saw
more aggressive bids across the benchmark curve from the few available market
participants with yields expanding by an average of c.6bps to close the week.
The NGERIA Corps, also played the same side
with the sovereign i.e. very calm trading session amongst the few tracked
papers with a slight uptick in yields for the ZEN 22s and UBA 22s which
expanded by c.1bps on both papers.
Related News
1.
CBN Keeps A Tight Hold On System Liquidity In OMO Auction
2.
Rates Fall Again As Local Demand Piles Up At NTB Auction
3.
FGN Bond Yields Still Give Way Despite Improved Offers
Across The Curve
4.
Treasury Bill Auction Holds On Wednesday July 1st, 2020
5.
Bond Yields Continue To Tank Despite A Sluggish Start To
The Week
6.
Coming Soon: NOVAMBL Investments SPV Plc N10bn Series
Bond Issuance
7. Anchoria FI Monitor: MSCI Express Concern on the
Depreciation of Liquidity in the Nigerian FX Market