The Apex Bank Finally Floats The Much-Anticipated OMO Auction After One Month Of Non-Issuance

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Friday, August 14, 2020 / 5:49 AM / By Zedcrest Capital / Header Image Credit: Shuttershock


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FGN Bonds

Yields on FGN Bonds still dropped today, despite a slowdown in market activities in a drab trading session. The market remained bided across the curve but wide spreads made trading a tad difficult. The 2050s saw some actions at the early hours of the day while all other maturities coasted around the market opening level with their bid/offer staying wide apart. Consequently, yields compressed by c.1bps on the average across the benchmark curve.

While market activities will most likely remain low during tomorrow's session, we expect the market to stay skewed to bulls.

 

Benchmark FGN Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

 

16.39 27-Jan-22

5.93

2.85

(0.05)

 

12.75 27-Apr-23

6.10

4.50

0.11

 

14.20 14-Mar-24

6.01

4.42

(0.01)

 

13.53 23-Mar-25

6.19

4.53

(0.01)

 

12.50 22-Jan-26

6.90

6.51

0.05

 

16.29 17-Mar-27

7.96

7.35

(0.01)

 

13.98 23-Feb-28

8.50

7.25

0.30

 

14.55 26-Apr-29

8.85

8.12

0.00

 

12.15 18-Jul-34

9.52

9.08

0.00

 

12.40 18-Mar-36

9.75

9.32

(0.11)

 

16.2499 18-Apr-37

9.75

9.32

(0.27)

 

14.80 26-Apr-49

10.00

9.72

0.00

 

 

Treasury Bills

The OMO bills space traded on a muted note following the announcement of OMO auction by the Apex bank. Trickles of demand were seen for longer-dated bills albeit no trades as these demands were met with poor axes. At the OMO auction, The Apex bank floated but sold c.91% of the total amount offered across the 3 tenors on auction following healthy demand (total subscription 1.89X offer amount), while dropping the stop rates in comparison with the last auction by an average of c.4bps.

The NTB space also saw slight action as unmet demand from yesterday’s auction seeped into the market today especially for the one-year papers which were offered around 2.95% levels.

We expect activities to pick in tomorrow's trading session, especially on the newly issued OMO bills, although this could be tapered by the effect of expected outflows on system liquidity.

 

OMO AUCTION RESULT

 OMO - 13 AUG 2020
 

Tenor

Rate (%)

Offer (₦’bn)

Sub (₦'bn)

Sale (₦'bn)

Previous Rate (%)

Changes

103 days

4.920

10.00

5.56

5.56

4.9500

-0.0003

173 days

7.740

10.00

9.80

9.80

7.7900

-0.0005

362 days

8.940

30.00

79.08

30.00

8.9900

-0.0005

 


Benchmark OMO Bills

Description

Bid (%)

Offer (%)

Day Change (%)

NGOMO 9/3/2020

4.00

0.01

(0.50)

NGOMO 10/1/2020

4.50

0.01

0.00

NGOMO 11/03/2020

4.50

0.01

(0.50)

NGOMO 12/01/2020

5.00

0.01

0.00

NGOMO 02/02/2021

5.50

0.01

0.00

NGOMOB 0 03/02/21

6.00

0.01

0.00

NGOMOB 0 05/11/21

6.00

0.01

0.00

 


Benchmark NTBills

Description

Bid (%)

Offer (%)

Day Change (%)

NIGTB 10/1/2020

2.50

0.01

0.00

NIGTB 11/12/2020

3.00

0.01

0.00

NIGTB 01/14/2021

3.00

0.01

0.00

NIGTB 02/11/2021

3.50

0.01

0.00

NIGTB 04/29/2021

3.50

0.01

0.00

NIGTB 05/13/21

4.00

0.01

0.00

NIGTB 06/10/21

4.00

0.01

0.00

 

Money Markets

OBB and OVN rates dropped by c.29% on the average compared to yesterday’s close with little funding pressures added to local banks as market liquidity opened positive at c.N235BN.

We expect upward adjustments in rates tomorrow as market participants scout to fund the bi-weekly FX retail intervention.

 

Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

3.00

4.33

Overnight (O/N)

3.79

5.25

 

FX Market

The FX space remained poorly supplied across all market segments. The IEFX window continued to trade very lean as trade volumes remained depressed while most market participants stayed bided at N385.00/$ and N389.00/$ although its rates appreciated slightly by 0.17k D/D. However, for other market segments, rates remained unchanged for another trading session.

 

FX Market

Current (N/$)

Previous ( N/$)

CBN Spot

381.00

381.00

CBN SMIS

380.69

380.69

I&E FX Window

385.83

386.00

Cash Market

473.00

473.00

Transfer Market

475.00

475.00

 

Eurobonds

The NIGERIA Sovereigns Eurobond curve continued its bullish run in today’s trading session, with improving demand and much aggressive bids across the sovereign curve without any left behind as oil prices continue to show positive outlook in the international market. The belly of the curve remained the major winner shedding an average of c.22bps D/D. Overall, yields compressed by an average of c.17bps across the sovereign curve. In the SSA space, the EGYPTs continued its rally for a second consecutive session, as prices on those papers consolidated with further gains (+30c) while the ANGOLs also strengthened (+15c).

The NGERIA Corporate Eurobond curve had a quiet session today although the market continues to show interest in most of the tracked papers. The ETINL 24s was the major gainer among the tracked papers, dropping by c.08bps D/D.


Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.


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Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.

 

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