Bond Yields Closed the Year at 14% as Market Players Repriced the 20-Yr Lower


Friday, December 29, 2017 7:00PM / @ZedcrestCapital 

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 Proshare Nigeria Pvt. Ltd.


The bond market traded on a relatively quiet note for most of the day, we however witnessed continued profit taking on the 20-yr bond which took its yield significantly higher by c.20bps to 13.95%.  Average bond yields compressed by 6bps to close the year at 14.00% on the backdrop of some closing market buys on the 2026 and 2027 bonds, which compressed their yields by c.10bps to 14.10% and 14.15% respectively. We expect a bullish open to the New Year as market players are likely to renew their demand for bonds at current levels.

 Proshare Nigeria Pvt. Ltd.


 Treasury Bills

The T-bills market remained quiet as in previous sessions, even as the CBN conducted its last OMO auction for the year, selling a total of N11bn 90-day, and N88bn 279-day bills, with stop rates clearing at 12.80% and 14.60% respectively. We expect the market to be relatively client driven in the opening session of the year, even as market players position for the first NTB auction of the year, scheduled to hold on the 3rd of January, following its suspension by the DMO in the month of December.

 Proshare Nigeria Pvt. Ltd.

Money Market

The OBB and OVN rates declined slightly to close the year at 3.83% and 4.25%, as the CBN did not conduct a retail SMIS as expected. System liquidity consequently remained buoyant to close the year on a positive note of N400bn.

 Proshare Nigeria Pvt. Ltd.

FX Market

The CBN Official spot rate appreciated by 0.02% to close the year at N306.00/$. Rates at the Investors and exporters FX window also appreciated by 0.07% to close at N360.33/$. Rates at the parallel market however remained stable to close at N363.50/$.

 Proshare Nigeria Pvt. Ltd.

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