Treasury Bills Market Sustain Bull Run As CBN Holds Off On OMO

Proshare

Monday, June 17, 2019    /  07:00PM  /  Zedcrest Capital / Header Image Credit: Sun Nigeria

 

Activities in the Treasury Bills commenced on a positive note, as demand remained for short- to mid-dated maturities given the absence of an OMO auction from the CBN despite buoyant system liquidity. 

Below are highlights from activities in the fixed income and forex market today.

 

Bonds

The Bond Market opened the week on a muted note, with some flows witnessed on some short- to mid-dated maturities. Spreads compressed as offers improved across the benchmark bond curve, leaving average yields relatively unchanged at 14.68%. 

We expect the market to remain order-driven, as markets stay cautious in the near term ahead of the forthcoming bond auction later this month.

 

Benchmark FGN Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

14.50 15-Jul-21

14.77

14.25

0.00

16.39 27-Jan-22

14.59

14.03

0.16

12.75 27-Apr-23

14.63

14.35

0.23

14.20 14-Mar-24

14.48

14.18

0.00

13.53 23-Mar-25

14.70

14.46

(0.08)

12.50 22-Jan-26

14.75

14.40

0.04

16.29 17-Mar-27

14.72

14.44

(0.12)

13.98 23-Feb-28

14.69

14.65

(0.01)

12.15 18-Jul-34

14.71

14.58

(0.12)

12.40 18-Mar-36

14.62

14.57

(0.13)

16.2499 18-Apr-37

14.76

14.52

(0.03)


Source: Zedcrest Dealing Desk

 

Treasury Bills

Yields across the Benchmark NTB curve compressed by c.2bps on the average. We expect the market to remain bullish in the near term, barring an OMO auction by the CBN.


Benchmark Treasury Bills

Description

Bid (%)

Offer (%)

Day Change (%)

18-Jul-19

10.00

5.00

(1.50)

1-Aug-19

12.00

5.00

0.50

12-Sep-19

12.10

10.00

1.10

3-Oct-19

11.80

11.60

(0.20)

14-Nov-19

12.15

11.55

0.00

5-Dec-19

12.20

11.55

0.10

2-Jan-20

12.05

11.95

(0.20)

6-Feb-20

12.25

12.15

0.00

19-Mar-20

12.25

12.05

0.00

2-Apr-20

12.25

12.00

0.00

14-May-20

12.30

12.10

(0.05)

04-Jun-20

12.30

12.10

0.00

Source: Zedcrest Dealing Desk

 

 

Money Market

Money market rates opened the week higher off the back of funding pressures for the weekly FX Wholesale auction as well as FX swaps by the CBN. OBB and OVN rates closed the session at 8.86% and 9.43% respectively, as system liquidity is estimated to close the day at c.N170bn positive. 

With the reduction in system liquidity, we expect the rates to remain at elevated for most of the week, with some respite from OMO maturities of c.N89bn expected later in the week.

 

Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

8.86

5.29

Overnight (O/N)

9.43

5.71

Source: FMDQ, Zedcrest Research 

 

FX Market

At the interbank, the Naira/USD rate appreciated by 0.02% to close at N306.95/$ (spot) but remained unchanged at N356.92/$ (SMIS) opening the week. The Naira remained stable at I&E window, to close at N360.50/$. 

The cash rate at the parallel market depreciated by 0.25% to close at N360.00/$ while the transfer rate remained unchanged at N362.50/$.

 

FX Market

 

Current (N/$)

Previous ( N/$)

CBN Spot

306.95

307.00

CBN SMIS

356.92

356.92

I&E FX Window

360.50

360.51

Cash Market

360.00

359.10

Transfer Market

362.50

362.50

Source: CBN, FMDQ, REXEL BDC 

 

Eurobonds

The NGERIA Sovereigns saw some positive sentiments return, as US and UK bulls markets paused in the short term. Yields compressed by c.3bps on the average across the sovereign curve, with gains most visible at the short-date papers.

 

The NGERIA Corps remained relatively unchanged in quoted prices, however, yield valuations improved across most of the tracked papers.

 

Proshare Nigeria Pvt. Ltd.

 

 

Proshare Nigeria Pvt. Ltd.



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 Proshare Nigeria Pvt. Ltd.

 

 

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