Secondary Market Volumes Increase As Investors Scurry To Reinvest

Proshare

 SaturdayOctober 5, 2019 / 05.00PM / by Zedcrest Capital /Header Image Credit: Interest.co.nz


Below were highlights of trading activities in the fixed income and forex market today 

 

Bonds

Activity in the Bond market picked up in today's trading session, demand improved at the mid-end of the bond curve. We noticed a preference for yields, as investors dumped the 2028s in favour of the higher-yielding 2029s. Yields consequently compressed by c.1bp on the average across the benchmark yield curve.

 

We expect a slight increase in demand for bonds, as investors weigh reinvestment options for bond maturities of c.N234bn expected later in the month.




Proshare Nigeria Pvt. Ltd.


Source: Zedcrest Dealing Desk 

 

Treasury Bills

The T-bills market opened on a bullish trend, most especially at the long-end of the NTB curve, as investor demand flowed into the secondary market in the absence of an OMO auction. We noted large trading activity on the 28-sept-20 and 1-oct-20 maturities in particular, which saw c.25bps downward movement in yields. Yields consequently closed the week lower by c.6bps on the average across the benchmark NTB curve.

 

We expect the current bullish trend to be sustained opening the week, supported by buoyant system liquidity.

 

Benchmark Treasury Bills

Description

Bid (%)

Offer (%)

Day Change (%)

14-Nov-19

12.60

11.70

0.10

5-Dec-19

12.80

12.40

0.10

2-Jan-20

12.10

11.60

(0.40)

6-Feb-20

12.80

12.00

(0.20)

19-Mar-20

12.80

11.60

(0.10)

2-Apr-20

12.80

11.80

0.00

14-May-20

13.10

12.60

0.20

04-Jun-20

13.00

12.20

0.00

02-Jul-20

12.95

12.75

(0.30)

13-Aug-20

13.10

12.85

(0.05)

3-Sep-20

13.20

12.75

(0.05)

Source: Zedcrest Dealing Desk

 

Money Market

Money market rates dropped by an average of c.500bps from yesterday as expected with the excess liquidity in the market. OBB and OVN rates closed the week at 2.71% and 3.43% respectively.

 

We expect money market rates to remain low barring any aggressive mop-up by the CBN.

 

Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

2.71

8.05

Overnight (O/N)

3.43

9.50

Source: FMDQ, Zedcrest 


FX Market

At the interbank, the Naira/USD spot rate remained stable at N307.00/$ while the SMIS rates remained stable at N358.13/$. At the I&E window, the closing rate for the Naira was depreciated by 22k to close the week at N362.77/$.

The cash and transfer rates at the parallel markets also saw no change, closing at N357.80/$ and N362.50/$ respectively.



FX Market

 

Current (N/$)

Previous ( N/$)

CBN Spot

307.00

307.00

CBN SMIS

358.13

358.13

I&E FX Window

362.77

362.55

Cash Market

357.80

357.80

Transfer Market

362.50

362.50

Source: CBN, FMDQ, REXEL BDC

 

Eurobonds

Trading activity in the NGERIA Sovereigns and Corps papers closed the week on a muted note. Nigerian financial bank papers remained pressured in the aftermath of debits worth $1.4 billion in penalties over failure to meet the set loan to deposit ratios by the Central Bank of Nigeria as it tries to spur growth in the economy.

 

 

Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.

 

 

 

 

Related News

1.      Interswitch Limited Bond Issue Coming Soon

2.     P and ID Versus Nigeria... How The Markets Have Responded

3.     Treasury Bills Auction Scheduled For October 2nd, 2019

4.     The Bulls Re-Emerge As Average Yield On T-Bills Dips To 13.3% WoW On System Liquidity Boost

5.     Investors Look to Secondary Market to Fill Demand, Treasury Bills Close Week Bullish

6.     CBN Sells 364-Day OMO T-Bills On A 46.00% Pro-rata Basis, Cuts Rates By 2bps

7.      Summary of FGN Bond Auction Results For September 2019

8.     September 2019 FGN Bond Auction Oversubscribed

9.     DMO Struggles to Raise Long Term Debt for a Second Consecutive Auction

10.  FMDQ Securities Depository Goes Live, To Enhance Market Efficiency

11.   Bearish Momentum Sustained As Average T-Bills Yield Advances 23bps WoW To 13.6%

12.   NSE Lists FGN Savings Bonds 

 

Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.

 

READ MORE:
Related News
SCROLL TO TOP