Topsy-Turvy Session To Close The Week

Proshare

 

Saturday, April 17, 2021 / 07:00 PM  / By Zedcrest Capital / Header Image Credit: famagusta-gazette.com/

 

 

FGN Bonds

The FGN Bond market closed out the week on a volatile note, with trade activity pushing yields in both directions in a single trade session. The early hours of the session followed the bearish pattern for most of the week, with wide bid-and-offer spreads quoted across the benchmark curve. The spreads eventually tightened as the session moved on, as bids improved from a plethora of short-covering bids especially at the long-end of the curve which saw bids below 14.00% for the first time all week.  Yields closed the session by c.7bps higher on the average across the benchmark curve.

 

As the market is expected to price in expectations for auction-on-auction rate increases at the monthly FGN Bond auction, we remain skeptical of short-term volatility and maintain a bearish outlook on the movement of yields as the main theme for the year 2021.

Benchmark FGN Bonds

 

Description

Bid (%)

Offer (%)

Day Change (%)

12.75 27-Apr-23

9.15

7.00

0.00

14.20 14-Mar-24

10.00

7.30

0.45

13.53 23-Mar-25

10.50

8.90

0.30

12.50 22-Jan-26

12.20

11.50

0.00

16.29 17-Mar-27

12.70

11.80

0.00

13.98 23-Feb-28

12.75

11.75

0.00

14.55 26-Apr-29

12.85

11.80

0.00

12.15 18-Jul-34

13.50

12.70

0.00

12.50 27-Mar-35

13.55

12.75

0.00

12.40 18-Mar-36

13.60

12.80

0.00

16.2499 18-Apr-37

13.65

12.90

0.00

9.80 24-Jul-45

14.10

13.80

0.05

14.80 26-Apr-49

14.10

13.70

0.10

12.98 27-Mar-50

14.15

13.70

0.15

 

Treasury Bills

The treasury bills market closed the week pm a weak note, as prolonged tight system liquidity levels continue to dampen any demand for single-digit rates for short-dated instruments. We saw offers for NTBs inch higher as institutional demand for short-term interest rates continues to move towards elevated fixed deposit rates from local banks.

 

We expect short-term rates to remain elevated as the CBN continues to keep a tight hold on interbank system liquidity while reducing its supply of new OMOs at its auctions.

 

Benchmark OMO Bills

Description

Bid (%)

Offer (%)

Day Change (%)

NGOMOB 0 05/11/21

10.00

0.05

0.00

NGOMOB 0 06/08/21

10.00

0.05

0.00

NGOMOB 0 08/10/21

10.00

0.10

0.00

NGOMOB 0 09/07/21

9.00

0.10

0.00

NGOMOB 0 10/19/21

10.00

0.10

0.00

NGOMOB 0 11/02/21

10.00

0.20

0.00

NGOMOB 0 12/07/21

11.00

0.20

0.00

NGOMOB 0 01/11/22

11.00

0.20

0.00

NGOMOB 0 02/01/22

12.00

0.20

0.00

NGOMOB 0 03/01/22

12.00

0.20

0.00

 

Benchmark NT-Bills

Description

Bid (%)

Offer (%)

Day Change (%)

NIGTB 0 04/29/21

7.00

0.05

0.00

NIGTB 0 05/13/21

9.00

0.05

0.00

NIGTB 0 06/10/21

8.00

0.05

0.00

NIGTB 0 07/01/21

9.00

0.05

0.00

NIGTB 0 08/26/21

9.00

0.10

0.00

NIGTB 0 09/09/21

9.00

0.10

0.00

NIGTB 0 10/14/21

9.00

0.10

0.00

NIGTB 0 11/11/21

10.00

0.20

0.00

NIGTB 0 01/13/22

10.00

0.20

0.00

NIGTB 0 02/10/22

11.00

0.20

0.00

 

Money Markets

Interbank Money Market rates close the week at a two-week high as banks looked to buffer their funding positions for the latest CRR debit. Open Buy-Back (OBB) and Overnight (O/N) rates went higher by 1192bps on the average higher, closing the session at 25.00% and 28.33% respectfully.

 

We expect rates to remain elevated going into the coming week, with tight system liquidity not getting much respite from OMO maturities, only N20Bn of which will flow into the system next week.


Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

25.00

14.50

Overnight (O/N)

28.33

15.00

 

FX Market

Supply in the I&E FX window took a 47.00% D/D dip, as the traded volume dropped to c.61.52$million (although still higher than the average daily volume so far this month). Most participants were bided between N393.00/$ and N437.62/$ with the closing rate depreciating by c.0.12% D/D to close the week at N411.00/$.

 

At the parallel market, the cash rate remained stable at N480.00/$ while the transfer rate appreciated by c.0.12% to close at N498.40/$.


FX Market

Current (N/$)

Previous (N/$)

CBN Spot

379.00

379.00

CBN SMIS

380.69

380.69

I&E FX Window

411.00

410.50

Cash Market

480.00

480.00

Transfer Market

498.40

499.00

 

Eurobonds

The NIGERIA Sovereigns closed the week on a relatively improved note, as oil-related sovereign papers improved as Brent continued to steadily increase.  Yields compressed by an average of c.6bps across the benchmark curve at the close of the session.

 

The NIGERIA Corporates also had a positive trading session to close the week, with demand seen across most of the tracked papers.

 

Proshare Nigeria Pvt. Ltd.



Proshare Nigeria Pvt. Ltd.

 

 

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