System Liquidity Rises above N500bn, bolstered by Net OMO Repayments


Thursday, June 7, 2018 7:00PM / Zedcrest Capital

*** CBN issues guidelines on Naira-Renminbi swap deal; May Start twice-weekly Renminbi Auctions***

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The Bond market traded on a mixed note, with some demand on the shorter end  of the curve (2019s) offset by some sell on the longer end  (34s & 36s). Yields consequently rose by c.2bps avg, as market players remained relatively risk off especially on the longer tenured maturities. We expect yields to remain weak in the near term, largely due to weakening bids on the longer end of the curve.


 Proshare Nigeria Pvt. Ltd.

Treasury Bills

The T-bills Market traded on a relatively quiet note, with yields compressing slightly by c.5bps on average. This was as the CBN intervened in the market via a total OMO sale of c.N190bn. This was however significantly lower than the total amount offered (N400bn) and the total amount that matured (N327bn). We expect yields to remain stable tomorrow, barring a significant liquidity Mop up via a further OMO sale by the CBN.


 Proshare Nigeria Pvt. Ltd.


Money Market

The OBB and OVN rates remained relatively stable at 3.00% and 3.58% respectively. This was as system liquidity remained significantly buoyant at c.N580bn long, following inflows from OMO T-bill maturities, which more than offset outflows from today’s OMO sale. We expect that the CBN may float another OMO tomorrow, to make up for the residual offered amounts. Auction demand if this happens is however expected to remain weak, as market players have shown stronger preference for liquidity in anticipation of funding for their retail FX bids tomorrow.


 Proshare Nigeria Pvt. Ltd.


FX Market

The Interbank rate remained stable at its previous rate of N305.95/$, even as system liquidity maintained a steady decretion down to $47.43bn as at 6-June. The I&E FX rate also remained stable at N360.94/$. In the parallel market, the cash rate depreciated by N1.00 to N361.50/$, while the transfer market rate remained stable at N364.00/$.


 Proshare Nigeria Pvt. Ltd.



The NGERIA Sovereigns remained bearish with yields trending higher by c.4bps on average. We witnessed the most selloff on the 2032s and 2047s which lost –50pt and –0.35pt respectively.


The NGERIA Corps remained slightly bearish, with the most selloff witnessed on the longer dated tickers. We witnessed the most selloff on the FIDBAN 22s which lost –0.60pt as of last trades, now trading 101.40/102.00.



 Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.




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