Bond Yields Continue To Tank Despite A Sluggish Start To The Week

Proshare

Monday, June 29, 2020 / 05:11 PM / By Zedcrest Capital  / Header Image Credit: Investireoggi


Proshare Nigeria Pvt. Ltd.


FGN Bonds

The bond market started off the new week on a very sluggish note even as yields fell further across the benchmark curve. We observed few transactions at the belly and tail of the curve, particularly on the 2027s and 2035s which traded around 8.40% and 9.90% respectively. The 2049s and 2050s papers for most of the trading session were bided around 10.95%, but there were very few offers to match. Consequently, yields dropped by another c.45bps on average across the benchmark maturities.

 

We expect the appetite for bonds remain low especially at these market levels and expect offers to improve during tomorrow's session to attract investors' interests.

 

Benchmark FGN Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

 

14.50 15-Jul-21

4.53

3.61

(0.48)

 

16.39 27-Jan-22

4.70

3.84

(0.29)

 

12.75 27-Apr-23

6.54

5.57

(0.44)

 

14.20 14-Mar-24

6.49

5.70

(0.41)

 

13.53 23-Mar-25

7.03

5.30

(0.33)

 

12.50 22-Jan-26

8.17

7.38

(0.52)

 

16.29 17-Mar-27

8.85

8.21

(0.84)

 

13.98 23-Feb-28

9.01

8.25

(0.75)

 

14.55 26-Apr-29

9.10

8.37

(0.75)

 

12.15 18-Jul-34

10.12

9.88

(0.13)

 

12.40 18-Mar-36

10.20

9.95

(0.06)

 

16.2499 18-Apr-37

10.12

10.00

(0.56)

 

14.80 26-Apr-49

11.04

10.86

(0.31)

 

 

Treasury Bills

The OMO bills traded on a very calm note, with offers seen across the curve throughout the day. The January 2021 papers were offered at 5.60% levels while September and October bills were offered at 4.00% and 4.20% respectively. We saw some client driven orders for the 13th August bill, albeit little volumes traded around 4.00% level.

The NTB space was also very frail, although we saw few orders for January NTB bills which was offered at 2% level.

The market is expected to stay very fragile and probably remain bearish tomorrow, as tight liquidity system liquidity continues to weigh on active position-taking.

 

 

Benchmark OMO Bills

Description

Bid (%)

Offer (%)

Day Change (%)

NGOMO 7/2/2020

6.00

2.50

0.00

NGOMO 8/13/2020

3.75

2.50

0.25

NGOMO 9/3/2020

6.85

4.00

(0.15)

NGOMO 10/1/2020

6.85

4.25

(0.15)

NGOMO 11/03/2020

6.85

3.50

(0.15)

NGOMO 12/01/2020

6.85

4.50

(0.15)

NGOMO 01/05/2021

7.00

5.00

0.00

NGOMO 02/02/2021

7.25

4.50

0.25

NGOMO 03/02/21

7.50

4.80

0.50

 

Benchmark NTBills

Description

Bid (%)

Offer (%)

Day Change (%)

NIGTB 2-Jul-20

3.00

0.50

0.00

NIGTB 1-Oct-20

3.50

0.50

0.00

NIGTB 12-Nov-20

3.75

0.50

(0.25)

NIGTB 14-Jan-21

4.00

0.50

0.00

NIGTB 11-Feb-21

4.00

0.50

0.00

 

Money Markets

Rates in the Interbank Market dropped slightly by an average of c.35bps due to the less funding needs in the interbank market although market liquidity remained low with an estimated closing of c.70BN positive, while OBB and OVN rates closed the day at 14.92% and 15.67% respectively.

We do not expect any swift reversal in rates in the interbank market tomorrow since system liquidity may remain at this low level, however, we should see a slight improvement in rates by mid-week when inflows from OMO maturities (c.89BN) is credited into the system.

 

Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

14.92

15.20

Overnight (O/N)

15.67

16.10

 

FX Market

The Nigerian IEFX window rates appreciated slightly by 0.09% compared to Friday's closing albeit very low volumes traded while most banks remained bided at in the market within N385/$-N389/$ range.

At the parallel market, the Naira lost approximately N1.80K in both cash and transfer window to close at N458.60/$ and N461.00/$ respectively. All other market segments remained unchanged today by the business close.

 

FX Market

Current (N/$)

Previous ( N/$)

CBN Spot

361.00

361.00

CBN SMIS

380.69

380.69

I&E FX Window

386.00

386.33

Cash Market

458.60

457.00

Transfer Market

461.00

459.00

 

Eurobonds

The NGERIA Sovereigns tickers opened the week on a toned-down note, with very few trades witnessed in that space and yields expanding slightly at c.5bps across the benchmark curve. The Angola bonds retained its most-sought-after status amongst the sub-Saharan bonds especially for the 2025s and 2028s maturities which was offered at 11.60% and 11.62% respectively, 10bps lower when compared to Friday's closing.  

The NGERIA Corps followed the same trading path as the Sovereigns, with slight interests seen for the ACCESS 21s which dropped by 101bps 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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