Calmness in The IEFX Window as The CBN Steadily Intervenes in The Interim

Proshare

Wednesday, December 9, 2020 / 7:44 AM / By Zedcrest Capital / Header Image Credit: The Business Times


Proshare Nigeria Pvt. Ltd.


FGN Bonds

FGN Bond space saw little traction during today's session, most especially for the 2049s and 2050s which were offered approximately 30bps above yesterday's closing level. As usual, the market traded on a very passive note at the early hours but picked up by close as offers met the few bids available on the 2049s and 2050s maturities at 7.30% and 7.20%, respectively.

At the belly of the curve, the 2034s and 2036s papers started off showing its offers at 5.15% but expanded to about 5.50% levels by mid-day, although the few bids quoted stayed at the 7.00% level, making it challenging to deal. We also saw little action on the 2029s maturity, which open day offered at around 4.75% level but eventually traded around the mid 4.80% level.

 

Although market momentum is less likely to improve in the short term, we hope to see more interest from local investors as yields improve across the benchmark curve.

 

Benchmark FGN Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

 

16.39 27-Jan-22

4.00

0.69

0.35

 

12.75 27-Apr-23

4.00

1.20

0.01

 

14.20 14-Mar-24

4.00

1.21

0.03

 

13.53 23-Mar-25

4.00

1.25

(0.04)

 

12.50 22-Jan-26

5.49

3.45

0.21

 

16.29 17-Mar-27

5.49

3.51

(0.23)

 

13.98 23-Feb-28

6.00

4.10

0.12

 

14.55 26-Apr-29

6.50

4.00

0.54

 

12.15 18-Jul-34

7.00

5.00

0.20

 

12.50 27-Mar-35

7.00

5.00

(0.10)

 

12.40 18-Mar-36

7.00

5.00

(0.09)

 

16.2499 18-Apr-37

7.00

5.00

(0.08)

 

9.80 24-Jul-45

8.00

5.30

0.82

 

14.80 26-Apr-49

8.89

7.00

1.39

 

12.98 27-Mar-50

9.00

7.00

1.50

 

 

Treasury Bills

The Treasury Bills maintained its one-way mood, remaining actively bearish on the mid and long-dated bills. The market opened extremely wide, indicating participants' apprehension about the flurry of offers in the market.  March and June bills were offered at 0.30% levels but expanded slightly by c.10bps by the business's close, while Oct-Nov bills stayed offered at 0.50% for most of the trading period.

We expect the treasury bills space to remain less active as market participants continue to anticipate the possible impact of the special bills announced by the Apex bank.

Benchmark OMO Bills

Description

Bid (%)

Offer (%)

Day Change (%)

NGOMOB 0 01/05/21

5.00

0.15

4.50

NGOMOB 0 02/02/21

5.00

0.20

4.50

NGOMOB 0 03/02/21

5.50

0.20

4.70

NGOMOB 0 05/11/21

6.00

0.30

5.20

NGOMOB 0 06/08/21

6.00

0.30

5.20

NGOMOB 0 08/10/21

6.50

0.35

5.70

NGOMOB 0 09/07/21

6.50

0.50

5.50

NGOMOB 0 10/19/21

7.00

0.50

5.90

 

 

Benchmark NTBills

Description

Bid (%)

Offer (%)

Day Change (%)

NIGTB 0 12/31/20

5.00

0.15

4.50

NIGTB 0 01/14/21

5.00

0.15

4.50

NIGTB 0 02/11/21

5.50

0.20

5.00

NIGTB 0 03/11/21

5.50

0.30

4.70

NIGTB 0 04/29/21

5.50

0.30

4.70

NIGTB 0 05/13/21

6.00

0.30

5.20

NIGTB 0 06/10/21

6.00

0.35

5.20

NIGTB 0 07/01/21

6.50

0.35

5.70

NIGTB 0 08/26/21

6.50

0.35

5.50

NIGTB 0 09/09/21

7.00

0.50

6.00

NIGTB 0 10/14/21

5.00

0.15

4.50

 

Money Markets

System Liquidity improved by over 100% compared to yesterday closing as inflows from OMO maturities hit the system. Consequently, OBB and OVN rates dropped by approximately .c47bps closing the day at 0.83% and 1.33%, respectively.

We expect rates to remain stable in the interim, as there are no major outflows expected to hit the market in the course of the week.


Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

0.83

1.42

Overnight (O/N)

1.33

1.67

 

FX Market

The IEFX markets had a regular session today, as the market continues to receive inflows from APEX bank while maintaining its sale rate within the range of N395/$1-N396/$1.The Cash/transfer window, on the other hand, opened the day lower compared to yesterday, closing at N467/$1 and N484/$1 respectively, however, depreciating by an average of N2.75k to close the day at N471.50/$1 and N485/$1 singly.

We expect the IEFX window to maintain its stability in the short-term which might eventually induce the appreciation of Naira in the parallel market.

FX Market

Current (N/$)

Previous (N/$)

CBN Spot

379.00

379.00

CBN SMIS

380.69

380.69

I&E FX Window

395.00

395.00

Cash Market

471.50

471.00

Transfer Market

485.00

487.00

 

Eurobonds

The NIGERIA Sovereigns opened the trading week with little changes/activity recorded. Yields on the sovereign curve weakened by a single basis point, as sentiments towards the papers aligned with another consecutive session.

The NIGERIA Corporates stayed quiet for most of the trading session although we noted slight interest for the recently issued FBN 2025 paper albeit in retail size.


Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.


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