Local Appetite for Bonds Continues to Weight Yields Down

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Tuesday, October 20, 2020 / 8:59 AM / By Zedcrest Capital / Header Image Credit: UBA Group


Proshare Nigeria Pvt. Ltd.


Below are highlights of trading activities in the fixed income and forex market on October 19, 2020


FGN Bonds

The FGN bond market opened on a bullish note as market activities remained focused on the mid and longest-dated bond papers especially on the 2049s and 2050s maturities. These papers continue to garner market interest following the non-inclusion of the 2026s and 2050s papers in the October bond auction circular. Bid/offer opened the day at 7.10/6.90 for the 49s and 50s maturities sliding down by an average of 17bps to close at 6.87%/6.83% although, by mid-day, we saw more offers largely spurred by actions from profit-takers causing yields to steady around the 6.83% levels on the offer.

We also saw few interests in the 2035s and 2045s papers which was offered at 5.30% and 6.10% respectively, although very few transactions printed as most of the bids stood around 25bps apart from the offers making it difficult to deal.

 

Tomorrow, we expect to see more actions from profit-takers which will likely cause rates to increase slightly especially at the belly and tail of the curve.


Benchmark FGN Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

 

16.39 27-Jan-22

2.23

0.18

0.00

 

12.75 27-Apr-23

2.75

0.03

(0.24)

 

14.20 14-Mar-24

3.00

1.00

(0.10)

 

13.53 23-Mar-25

3.20

1.55

(0.26)

 

12.50 22-Jan-26

4.25

2.97

0.78

 

16.29 17-Mar-27

4.68

3.73

(0.02)

 

13.98 23-Feb-28

4.73

3.76

0.27

 

14.55 26-Apr-29

5.00

4.05

(0.17)

 

12.15 18-Jul-34

6.00

5.00

(0.24)

 

12.40 18-Mar-36

6.20

5.50

(0.29)

 

16.2499 18-Apr-37

6.50

5.48

(0.23)

 

14.80 26-Apr-49

7.30

6.70

(0.12)

 

 

Treasury Bills

The OMO bills space opened and traded on a very quiet note as the market opened strictly one way (All bids and no offers). A few of the offers seen were on the 12th Oct maturity which traded around 1% level while some January papers were offered at 0.35%.

At the NTB space, we saw few poor offers for NTB September bills at around 0.70% although no transaction was consummated at these levels.

We expect the bills to remain very quiet with few trading actions given that the market is under-supplied. 

 

Benchmark OMO Bills

Description

Bid (%)

Offer (%)

Day Change (%)

NGOMO 11/03/2020

1.00

0.01

0.50

NGOMO 12/01/2020

1.00

0.75

0.00

NGOMO 01/05/2021

1.00

0.01

0.00

NGOMO 02/02/2021

1.00

0.01

(0.50)

NGOMOB 0 03/02/21

2.00

0.01

0.00

NGOMOB 0 05/11/21

2.00

0.01

0.00

NGOMOB 0 08/10/21

2.00

0.01

0.00

NGOMOB 0 09/07/21

2.00

0.01

0.00

NGOMO 11/03/2020

1.00

0.01

0.50

NGOMO 12/01/2020

1.00

0.75

0.00

 

 

Benchmark NTBills

Description

Bid (%)

Offer (%)

Day Change (%)

NIGTB 11/12/2020

1.00

0.01

0.50

NIGTB 01/14/2021

1.00

0.01

(0.50)

NIGTB 01/14/2021

1.00

0.01

(0.50)

NIGTB 02/11/2021

2.00

0.01

0.50

NIGTB 04/29/2021

2.00

0.01

0.00

NIGTB 05/13/21

2.00

0.01

0.00

NIGTB 06/10/21

2.00

0.01

0.00

NIGTB 07/01/21

2.00

0.01

0.00

NIGTB 08/26/21

2.00

0.01

0.00

NIGTB 08/26/21

2.00

0.01

0.35

NIGTB 09/09/21

2.00

0.01

0.20

NIGTB 11/12/2020

1.00

0.01

0.50

NIGTB 01/14/2021

1.00

0.01

(0.50)

 


Proshare Nigeria Pvt. Ltd. 


Money Markets

The interbank system liquidity improved by c.64.85% to open the week at c.N771.83Bn following inflows from bond coupon payment and FAC by the apex bank. Consequently, dropping OBB and OVN rates to 1.00% and 1.88% levels respectively.

Interbank rates are expected to coast around these levels tomorrow as there are no funding needs required by banks to drive rates upward.

Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

1.00

1.17

Overnight (O/N)

1.88

2.00

 

FX Market

At the Interbank, most of the rates remained unchanged except at the IEFX window which saw an improved volume of c. $120m although still largely under-supplied compared to market demand with its rates depreciating slightly by c.17k.

FX Market

Current (N/$)

Previous ( N/$)

CBN Spot

379.00

379.00

CBN SMIS

380.69

380.69

I&E FX Window

386.00

385.83

Cash Market

450.00

450.00

Transfer Market

455.00

455.00

 

 

Eurobonds

The NIGERIA Sovereigns resumed its bullish run in today's trading session, as demand improved across the sovereign curve, especially on mid-tenured papers, caused mostly by short-covering by market dealers. By and large, Yields compressed by an average of c.14bps across the sovereign curve.

The NIGERIA Corporates opened the week on a rather drab session as the market remained lowly supplied on most of the tracked papers.


Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.


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