Bonds & Fixed Income | |
Bonds & Fixed Income | |
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Thursday, January 21, 2021 / 8:27AM / By Zedcrest Capital / Header Image Credit: iStock
FGN Bonds
The FGN
bonds market held its breath in today's session as traders anticipated the FGN
Bond primary market auction results. Yields across the benchmark curve remained
mostly unchanged from the previous day, with improved offers at the mid- to
long-end of the curve, as sentiments for a bearish auction result amplified
throughout the trading session. Consequently, yields expanded by an average of
c.4bps across the benchmark curve.
At the
bond auction, the DMO raised a total of c. N122.36bn (81.57% of the total
offered amount) across the three tenors offered despite a total bid-to-cover
ratio of 2.12X. Stop rates reflected secondary market trading levels, albeit
the 2035 and 2045 papers closed c.187bps higher than the December auction stop
rates.
We expect a cautious trading session opening
tomorrow, as the market reacts to the FGN bond auction results.
FGN Bonds Auction Result- Jan. 20, 2021 |
||||||
Maturity |
Rate
(%) |
Offer
(N'bn) |
Sub
(N'bn) |
Sale
(N'bn) |
Previous
Rate (%) |
Change |
Mar-27s |
7.98 |
50.00 |
91.84 |
49.40 |
0.00 |
0.0000 |
Mar-35 |
8.74 |
50.00 |
106.37 |
57.93 |
6.945 |
+1.7950 |
Jul-45 |
8.95 |
50.00 |
40.07 |
15.03 |
7.000 |
+1.9500 |
Benchmark FGN Bonds |
||||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
|
16.39
27-Jan-22 |
3.94 |
1.47 |
(0.03) |
|
12.75
27-Apr-23 |
5.50 |
2.92 |
0.04 |
|
14.20 14-Mar-24 |
6.20 |
3.80 |
0.00 |
|
13.53
23-Mar-25 |
7.05 |
5.00 |
(0.01) |
|
12.50
22-Jan-26 |
8.28 |
6.15 |
0.22 |
|
16.29
17-Mar-27 |
8.10 |
6.19 |
(0.01) |
|
13.98
23-Feb-28 |
8.29 |
7.67 |
0.00 |
|
14.55
26-Apr-29 |
8.55 |
7.87 |
0.00 |
|
12.15
18-Jul-34 |
9.61 |
8.85 |
0.00 |
|
12.50
27-Mar-35 |
9.73 |
8.65 |
0.00 |
|
12.40
18-Mar-36 |
9.61 |
8.80 |
0.00 |
|
16.2499
18-Apr-37 |
9.52 |
8.80 |
0.00 |
|
9.80
24-Jul-45 |
9.91 |
8.53 |
0.32 |
|
14.80
26-Apr-49 |
10.23 |
9.03 |
0.00 |
|
12.98
27-Mar-50 |
10.26 |
8.90 |
0.00 |
|
Treasury Bills
We saw
improved trading activity in treasury bills space supported with an active
demand for mid-and long-dated bills, which were offered at attractive levels in
the market. August, September and October 2021 bills saw most of the market
volumes with trade crossed at 0.75%,0.95%, and 1.00% respectively. 04th January
2021 bill was also in high demand during today's session, trading at 2.10% at
the early hours of the session, albeit buyer's appetite waned gradually when
offers began to drop below the 2% mark.
We expect
local banks to continue to cherry-pick on any available bill offered at an attractive
level while awaiting long dated OMO bills supply by offshore participants from
their anticipated OMO winnings from tomorrows auction.
Benchmark OMO Bills |
|||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
NGOMOB 0
02/02/21 |
8.00 |
0.03 |
0.00 |
NGOMOB 0
03/02/21 |
8.00 |
0.03 |
0.00 |
NGOMOB 0
05/11/21 |
8.00 |
0.04 |
0.00 |
NGOMOB 0
06/08/21 |
8.00 |
0.04 |
0.00 |
NGOMOB 0
08/10/21 |
8.00 |
0.04 |
0.00 |
NGOMOB 0
09/07/21 |
8.00 |
0.04 |
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 |
0.03 |
0.00 |
NIGTB 0
02/11/21 |
8.00 |
0.03 |
0.00 |
NIGTB 0 03/11/21 |
8.00 |
0.03 |
0.00 |
NIGTB 0
04/29/21 |
8.00 |
0.04 |
0.00 |
NIGTB 0
05/13/21 |
8.00 |
0.04 |
0.00 |
NIGTB 0
06/10/21 |
8.00 |
0.04 |
0.00 |
NIGTB 0
07/01/21 |
8.00 |
0.04 |
0.00 |
NIGTB 0
08/26/21 |
8.00 |
0.04 |
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 |
0.03 |
0.00 |
NIGTB 0
02/11/21 |
8.00 |
0.03 |
0.00 |
Money Markets
OBB and OVN rates increased by an
average of c.31bps, closing the day at 0.50% and 1.00%, respectively, despite
the market being awash with liquidity. System figures are estimated at
c.N586.24B positive closing the day.
We expect the funding rates to
remain steady tomorrow as we do not anticipate any significant funding activity
by local banks.
Money Market Rates |
||
|
Current (%) |
Previous (%) |
Open Buy Back (OBB) |
0.50 |
0.38 |
Overnight (O/N) |
1.00 |
0.50 |
FX Market
The I&E FX
Market received a good boost from exporters as we saw intra-day trading volumes
jumped up by over 234% to close at c.$89.50mio. Despite this support, we saw
the closing rate depreciate by N0.82k while the bid range amongst banks widened
by approximately N19.00 D/D.
At the parallel
markets, the cash segment depreciated by N1.00 due to the FX supply shortage,
although the transfer segment stayed flat at N485/1$.
FX Market |
||
Current (N/$) |
Previous (N/$) |
|
CBN Spot |
379.00 |
379.00 |
CBN SMIS |
380.69 |
380.69 |
I&E FX Window |
394.17 |
393.35 |
Cash Market |
474.00 |
473.00 |
Transfer Market |
485.00 |
485.00 |
Eurobonds
The NIGERIA Sovereign tickers continued a bullish
run from yesterday's session opening and staying green on most of the bonds
offered. We saw few aggressive bids on
most bond papers, especially for the short and longer-dated ones, consequently
causing the yield to compress D/D by an average of c.2bps across the curve. At
the SSA space, Angola's bond continued to gain positive vibes on the back of
increasing oil prices (Brent crude $56.65) and a peaceful Presidential
inauguration ceremony in the USA.
At NIGERIA Corps, tickers traded in a similar pattern as the sovereign papers, with just one of the tracked bonds moving in opposite directions based on market interest. By and Large, we noted the most significant movement on FIDBAN 22s and SEPLLN 22s, which compressed by -c.22bps and -c.71bps, respectively.
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