Finally, Out... CBN Drops the Long Awaited Special Bill at 0.50%

Proshare

Thursday, December 10 2020  / 11:16 AM / by Zedcrest Capital / Header Image Credit: Naija247news


Proshare Nigeria Pvt. Ltd.


FGN Bonds

The bond market kicked off on an active note as tension rose in the market following the unexpected outcome of the previous day PMA auction. Bid offer opened the day 400bps apart at the belly and tail of the curve but tighten as activities kicked in. Major losers were at the belly of the curve where offers jumped almost 120bps above yesterday's levels as most of the market trades settled around 7.25%. The 2049s and 2050s also expanded with only a 30bps yield movement while most of its market trade was between 7.50%-7.60%. Consequently, yields expanded by an average of 83bps across the benchmark curve.

 

We expect the market to stay bearish for tomorrow, albeit with low trading volumes from market participants.

 

Benchmark FGN Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

 

16.39 27-Jan-22

5.20

0.99

1.60

 

12.75 27-Apr-23

6.00

1.53

2.50

 

14.20 14-Mar-24

6.02

1.50

2.06

 

13.53 23-Mar-25

6.02

1.70

0.02

 

12.50 22-Jan-26

7.00

4.00

1.00

 

16.29 17-Mar-27

6.50

4.50

0.51

 

13.98 23-Feb-28

6.50

4.50

0.62

 

14.55 26-Apr-29

6.50

5.00

0.43

 

12.15 18-Jul-34

7.55

7.00

0.55

 

12.50 27-Mar-35

7.65

6.00

0.65

 

12.40 18-Mar-36

7.75

6.00

0.75

 

16.2499 18-Apr-37

7.80

6.00

0.80

 

9.80 24-Jul-45

7.50

5.50

0.50

 

14.80 26-Apr-49

7.65

7.45

(0.35)

 

12.98 27-Mar-50

7.64

7.45

(0.36)

 

 

Treasury Bills

The Treasury space started off the day mostly offered with little bids to trigger enjoyable market activities. Some activity picked up as the session wore on, notably on the newly issued 1yr NTB bill 09 Dec 2021 paper, which ended trading in the 1.50%-1.60% range. We also saw some interest in short-dated bills, which was offered around 0.30% levels.

 

We expect the market to remain calm for Tomorrow, with some order-driven requests on selected papers expected.

 

Benchmark OMO Bills

Description

Bid (%)

Offer (%)

Day Change (%)

NGOMOB 0 01/05/21

5.00

0.15

0.00

NGOMOB 0 02/02/21

5.00

0.20

0.00

NGOMOB 0 03/02/21

5.50

0.20

0.00

NGOMOB 0 05/11/21

6.00

0.30

0.00

NGOMOB 0 06/08/21

6.00

0.30

0.00

NGOMOB 0 08/10/21

6.50

0.35

0.00

NGOMOB 0 09/07/21

6.50

0.50

0.00

NGOMOB 0 10/19/21

7.00

0.50

0.00

 

 

Benchmark NTBills

Description

Bid (%)

Offer (%)

Day Change (%)

NIGTB 0 12/31/20

5.00

0.15

0.00

NIGTB 0 01/14/21

5.00

0.15

0.00

NIGTB 0 02/11/21

5.50

0.20

0.00

NIGTB 0 03/11/21

5.50

0.30

0.00

NIGTB 0 04/29/21

5.50

0.30

0.00

NIGTB 0 05/13/21

6.00

0.30

0.00

NIGTB 0 06/10/21

6.00

0.35

0.00

NIGTB 0 07/01/21

6.50

0.35

0.00

NIGTB 0 08/26/21

6.50

0.35

0.00

NIGTB 0 09/09/21

7.00

0.50

0.00

NIGTB 0 10/14/21

7.00

0.65

0.00

 

Money Markets

System liquidity remained very liquid, closing the day at approximately N513.29bn positive. However, we saw a slight movement in OBB and OVN, increasing by an average of c.40bps to close the day at 1.00% and 1.44%, respectively.

 

We expect rates to close the week at these low levels, as there are no significant outflows expected to hit the market in the course of trading tomorrow.

 

Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

1.00

0.67

Overnight (O/N)

1.44

0.92

 

FX Market

The Nigerian IEFX window was relatively stable as the rate changed slightly compared to yesterday, although the volumes traded at this level were very scanty.

 

At the parallel market, the Naira lost approximately N2.50K in both cash and transfer window to close at N475.00/$ and N488.00/$ respectively, while the CBN Spot and SMIS rates remained static at N379.00/$ and 380.69/$ respectively.

 

FX Market

Current (N/$)

Previous (N/$)

CBN Spot

379.00

379.00

CBN SMIS

380.69

380.69

I&E FX Window

394.60

394.67

Cash Market

475.00

473.00

Transfer Market

488.00

485.00

 

Eurobonds

The NIGERIA Sovereign tickers opened flat, with very low trades passing through the Nigeria space. However, we saw a bit of interest for mid-dated papers 31s and 32s, in particular, causing yields to compress slightly by an average c.1bps across the sovereign yield curve.

 

The NIGERIA Corps tickers also traded on a weak note, although yields remained unchanged D/D for most tracked papers.


Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.


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