Nigerian Eurobonds Dip Following Less Dovish US FED Stance

Proshare

Thursday, August 02, 2019 / 07:00 AM / By News Aggregator / Header Image Credit: Investopedia

  

The NGERIA Sovereigns traded on weaker note, with prices opening about 1pct lower before recouping some gains later in the day. This was due to selloffs by traders following less than expected dovish comments from the US FED following its quarter point rate cut.

 

Bonds

The FGN Bond Market remained relatively stable, with demand interests still witnessed on the short end of the curve. Yields consequently remained relatively unchanged on the day.

Whilst expecting stable bond yields in the near term, we are wary of the renewed trade tensions between the US and China, which whipsawed oil prices, following the announcement of further tariffs on China by the US president today.

 

Benchmark FGN Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

14.50 15-Jul-21

12.87

12.70

(0.13)

16.39 27-Jan-22

13.10

12.23

(0.01)

12.75 27-Apr-23

13.39

12.85

(0.04)

14.20 14-Mar-24

13.44

12.72

0.00

13.53 23-Mar-25

13.49

12.85

(0.02)

12.50 22-Jan-26

13.69

13.55

0.06

16.29 17-Mar-27

13.70

13.64

(0.05)

13.98 23-Feb-28

13.70

13.57

0.01

12.15 18-Jul-34

13.99

13.84

0.01

12.40 18-Mar-36

13.85

13.79

0.04

16.2499 18-Apr-37

13.82

13.74

0.02

14.80 26-Apr-49

14.04

13.97

(0.02)
































Source: Zedcrest Dealing Desk

 

Treasury Bills

The T-bills market traded on a slightly bullish note, as the CBN abstained from conducting an OMO auction, despite the inflows from OMO T-bill maturities and relatively ample system liquidity. Demand interests were however subdued, as market players positioned for the Retail FX funding expected tomorrow.

We expect yields to be slightly pressured, mostly on the short end of the curve, as banks fund for the CBN’s bi-weekly retail FX auction tomorrow.

 

Benchmark Treasury Bills

Description

Bid (%)

Offer (%)

Day Change (%)

12-Sep-19

10.75

8.00

(0.05)

3-Oct-19

10.85

8.00

(0.05)

14-Nov-19

10.65

10.40

0.10

5-Dec-19

10.95

10.70

0.00

2-Jan-20

11.10

10.95

0.00

6-Feb-20

11.10

10.70

0.00

19-Mar-20

11.00

10.60

(0.10)

2-Apr-20

11.00

10.75

(0.10)

14-May-20

11.00

10.65

(0.05)

04-Jun-20

11.00

10.60

(0.10)

02-Jul-20

11.00

10.60

0.10

Source: Zedcrest Dealing Desk

 

Money Market

Rates in the money market declined by c.1pct as inflows from OMO T-bill maturities further bolstered system liquidity levels. The OBB and OVN rates consequently ended the session at 2.50% and 3.21%, with system liquidity currently estimated at c.N330bn positive.

We expect rates to trend higher tomorrow, as banks fund for the Retail FX auction by the CBN.

 

Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

2.50

3.29

Overnight (O/N)

3.21

4.00

Source: FMDQ, Zedcrest

 

FX Market

At the interbank, the Naira/USD rate remained stable at N306.85/$ (spot) and N357.68/$ (SMIS). The NAFEX rate at the I&E window reverted back above the N362.00/$ mark to close at N362.23/$, as market turnover hit its lowest level since January at $64m. At the parallel market, the cash and transfer rates remained stable at N357.50/$ and N362.00/$ respectively.


FX Market

 

Current (N/$)

Previous ( N/$)

CBN Spot

306.85

306.85

CBN SMIS

357.68

357.68

I&E FX Window

362.23

361.68

Cash Market

357.50

357.50

Transfer Market

362.00

362.00

Source: CBN, FMDQ, REXEL BDC

 

Eurobonds

The NGERIA Sovereigns traded on weak note, as prices opened about one percent lower before recouping some gains later in the day.

The NGERIA Corps were also slightly better offered, with more selling interests witnessed in the FIDBAN 22s, ZENITH 22s and ETINL 24s.

 

Proshare Nigeria Pvt. Ltd.

 

 

 Proshare Nigeria Pvt. Ltd.


Related News

1.       Bond Yields Moderate Further Amid Continued Local Demand

2.       NAFEX Rate Hits Five Month High on Lower FPI Inflows

3.       Investors Renew Demand for Long Tenured FGN Bonds

4.       Bullish Run Halts as Average Yield Advanced 54bps WoW on Tight System Liquidity

5.       FMDQ OTC Holds 7th AGM, Achieves 22% Turnover From Trading Activities in 2018 FY

6.       Traders Take Profit on Nigerian Eurobonds Ahead of US FED Rate Decision

7.       Summary of FGN Bond Auction Results For July 2019

8.      July 2019 FGN Bond Auction Oversubscribed

9.       FGN Bond Yields Compress Following Robust Auction Demand

10.   Market Players Oversubscribe FGN Bond Auction by c.200%


Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

READ MORE:
Related News
SCROLL TO TOP