Bonds & Fixed Income | |
Bonds & Fixed Income | |
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PROSHARE | |
PROSHARE |
Saturday, November 28, 2020 / 11:30AM / Zedcrest
Capital / Header Image Credit: Thebizhub
Below
are highlights of trading activities in the fixed income and forex market on November
27, 2020
FGN Bonds
The FGN Bonds market
closed the week on a negative note, with yields creeping upwards following
reduced demand amidst supply from local players. Yields expanded by c.22bps on
the average across the benchmark bond curve, with the short-end yields retreating
the most in reaction to the gradual increase in short-term money market rates.
Select maturities at the mid- (2026s and 2028s) as well as long-end (2049s)
were not left out as sellers continued to searach for bids which continued to
shy away as has been noted all week.
We expect the market
to open the coming week with the same week sentiments, with some pockets of
demand expected on select maturities as institutional investors with residual
outstanding liquidity cherry-pick from the secondary market.
Benchmark FGN Bonds |
||||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
|
16.39 27-Jan-22 |
1.52 |
0.02 |
0.32 |
|
12.75 27-Apr-23 |
2.21 |
1.07 |
0.35 |
|
14.20 14-Mar-24 |
2.70 |
1.17 |
0.68 |
|
13.53 23-Mar-25 |
3.50 |
0.98 |
1.00 |
|
12.50 22-Jan-26 |
4.20 |
3.60 |
0.40 |
|
16.29 17-Mar-27 |
4.40 |
3.50 |
0.01 |
|
13.98 23-Feb-28 |
4.40 |
3.80 |
0.00 |
|
14.55 26-Apr-29 |
4.40 |
3.90 |
0.00 |
|
12.15 18-Jul-34 |
5.30 |
4.90 |
0.10 |
|
12.50 27-Mar-35 |
5.30 |
4.90 |
0.10 |
|
12.40 18-Mar-36 |
5.10 |
4.90 |
0.00 |
|
16.2499 18-Apr-37 |
5.20 |
4.90 |
0.00 |
|
9.80 24-Jul-45 |
6.15 |
5.40 |
0.00 |
|
14.80 26-Apr-49 |
7.03 |
6.50 |
0.33 |
|
12.98 27-Mar-50 |
7.00 |
6.50 |
0.00 |
|
Treasury Bills
Appetite for OMO
securities by local banks took a hit today, as bids for the long-dated
maturities pulled back by 10bps. Supply of OMO bills maturing in October and November
2021 improved during trading, with local banks offering at 0.15% levels as bids
remained shy. Mid-dated (February 2021) papers remained pressured, with demand
seen from a few offshore players at the end of the OMO curve. Consequently,
rates across the benchmark OMO curve weakened by 8bps on the average.
We expect the market
to remain weak, as apathy for rates at these low levels remains following
dropping system liquidity in the form of FX intervention flows.
Benchmark OMO Bills |
|||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
NGOMOB
01/05/21 |
0.10 |
0.00 |
0.05 |
NGOMOB
02/02/21 |
0.10 |
0.00 |
0.05 |
NGOMOB
03/02/21 |
0.10 |
0.00 |
0.05 |
NGOMOB
05/11/21 |
0.30 |
0.10 |
0.10 |
NGOMOB
06/08/21 |
0.30 |
0.10 |
0.10 |
NGOMOB
08/10/21 |
0.30 |
0.15 |
0.10 |
NGOMOB
09/07/21 |
0.30 |
0.15 |
0.10 |
NGOMOB
10/19/21 |
0.30 |
0.15 |
0.05 |
NGOMOB
01/05/21 |
0.10 |
0.00 |
0.05 |
Benchmark NTBills |
|||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
NIGTB
12/31/20 |
0.10 |
0.00 |
0.05 |
NIGTB
01/14/21 |
0.10 |
0.00 |
0.05 |
NIGTB
02/11/21 |
0.30 |
0.10 |
0.10 |
NIGTB
03/11/21 |
0.30 |
0.10 |
0.10 |
NIGTB
04/29/21 |
0.30 |
0.10 |
0.10 |
NIGTB
05/13/21 |
0.30 |
0.15 |
0.10 |
NIGTB
06/10/21 |
0.30 |
0.15 |
0.05 |
NIGTB
07/01/21 |
0.30 |
0.15 |
0.05 |
NIGTB
08/26/21 |
0.30 |
0.15 |
0.05 |
NIGTB
09/09/21 |
0.30 |
0.15 |
0.05 |
NIGTB
10/14/21 |
0.30 |
0.15 |
0.05 |
Money Markets
The Interbank
rates closed the week on a higher note, rising by 50bps to close the week at
1.25% and 1.50% for OBB and OVN rates respectively. This is on the back of
reduced system liquidity, which opened the day 13.28% lower at c.N295.48Bn.
We expect
rates to remain in the lower single digits opening the week as banks receive
inflows from FX funding refunds and OMO maturities.
Money Market Rates |
||
|
Current (%) |
Previous (%) |
Open Buy Back (OBB) |
1.25 |
0.75 |
Overnight (O/N) |
1.50 |
1.00 |
FX
Market
Volumes
traded in the I&E FX market dropped by 52% D/D in a still relatively active
trading session. The greenback changed crossed above the N400/$ mark for the
first time since June this year as demand pressures continue to heat up the
market. This came in despite the CBN providing some dollar supply to the foreign
portfolio investors (FPIs) at a new rate of N392.25/$.
In
addition, the Apex bank issued a circular to market participants, revising the
rates at the various official market segments upwards in a move effectively
devaluing the Naira for the third time this year. The revised rates take effect
from Monday, November 30, 2020.
The
Naira continued to weaken in the parallel market, as demand for the greenback
persists amidst little supply. The cash and transfer rates lost a further N5.00
on the average to close at N495.00/$ and N505.00/$ respectively.
|
FX Market |
|
||||||
|
Current (N/$) |
Previous (N/$) |
|
|||||
|
CBN Spot |
379.00 |
379.00 |
|
||||
|
CBN SMIS |
380.69 |
380.69 |
|
||||
|
I&E FX Window |
390.25 |
393.25 |
|
||||
|
Cash Market |
495.00 |
490.00 |
|
||||
|
Transfer Market |
505.00 |
500.00 |
|
||||
JAN. |
MAR. |
AUG. |
NOV. |
|||||
Official Rate |
307 |
360 |
380 |
380 |
||||
IMTO to Banks |
355 |
376 |
382 |
388 |
||||
Banks to CBN |
356 |
377 |
383 |
389 |
||||
CBN to BDCs |
357 |
378 |
384 |
390 |
||||
BDC to end-users |
360 |
380 |
386 |
392 |
||||
CBN to FPIs |
366 |
380 |
380 |
394 |
||||
Eurobonds
With global oil prices retained its recent gains after
the short slump seen over the Thanksgiving holiday, the NIGERIA Sovereign
papers traded with mixed sentiments in the last session of the week. The yield
curve remained relatively unmoved as demand remained at the short-end of the
curve countered the selling pressure seen at the long-end.
ANGOLA Sovereign bonds continued to lead the pack in
gains in the Sub-Saharan Africa space, as its finance minister reiterated his
commitment to maintaining positive credit risk for the oil-producing nation.
The NIGERIA Corporates saw sustained interest
in some of the tracked papers, especially the FIDBAN 2022s which gained 8bps
D/D.
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