The Bulls Still Out in the T-Bills Market as DMO Drops Rates

Proshare

Thursday, February 27, 2020 / 09:48 AM / By Zedcrest Capital / Header Image Credit: Missybanker

 

FGN Bonds

The Bond Market traded on a quiet note, with bullish sentiment seen across the bond curve. We saw the most volumes on the mid-tenured maturities (2028s and 2029s) as local investors scrambled to reinvest tomorrow's maturities at attractive yields. Yields dipped by c.1bp across the benchmark bond curve.


We expect a bullish market in tomorrow's session, supported by maturing funds of c.N920bn positively impacting the system.

 

Benchmark FGN Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

 

14.50 15-Jul-21

6.77

6.05

(0.01)

 

16.39 27-Jan-22

6.25

5.25

(0.01)

 

12.75 27-Apr-23

7.17

6.91

(0.01)

 

14.20 14-Mar-24

8.14

7.29

(0.01)

 

13.53 23-Mar-25

8.14

6.89

0.00

 

12.50 22-Jan-26

9.00

8.75

0.00

 

16.29 17-Mar-27

10.08

9.60

(0.13)

 

13.98 23-Feb-28

10.13

9.72

0.04

 

12.15 18-Jul-34

10.45

10.02

0.00

 

12.40 18-Mar-36

10.63

10.22

0.00

 

16.2499 18-Apr-37

10.81

10.23

0.00

 

14.80 26-Apr-49

11.99

11.91

0.01

 

 

Treasury Bills

The Treasury Bills market traded on bullish sentiment, as buy pressure spilled across the OMO curve. Demand was mostly camped at the long-end (5-Jan & 16-Feb), as we saw local players lock-in incoming OMO maturities of c.N920bn, with supply coming from foreign investors. Yields compressed by an average of c.5bps across the benchmark OMO curve.


The NTB side traded quiet, as local investors stayed cautious as they await PMA results. We saw pocket-size demand on the short-end, with client orders being filled. Yields compressed by an average of c.20bps across the benchmark NTB bills.


At the PMA, the DMO rolled over a total of c.N104.12bn across three tenors on offer. Stop rates closed lower on the 364-D (5.70%), while rates remained unchanged on the 91-D (3.00%bps), 182- D (4.00%) respectively from the last PMA.


We expect demand to persist in tomorrow's session, as excess cash at the disposal of investors, will force activity in the secondary market. We also expect the CBN to float an OMO auction, as c.N920bn of maturing funds flow into the system.

 

Primary Market Auction  Results

 

 

 

 

 

NTB  - 26 Feb 2020

Tenor

Rate (%)

Offer (₦'bn)

Sub (₦'bn)

Sale (₦'bn)

91-days

3.00

20.37

41.26

20.37

182-days

4.00

31.75

45.18

31.75

364-days

5.70

52.00

175.08

52.00

 

Benchmark OMO Bills

Description

Bid (%)

Offer (%)

Day Change (%)

NGOMO 19-Mar-20

11.00

9.00

0.00

NGOMO 2-Apr-20

11.00

8.00

(0.50)

NGOMO 14-May-20

11.00

9.00

0.00

NGOMO 4-Jun-20

11.00

9.00

(0.10)

NGOMO 2-Jul-20

11.25

9.00

(0.25)

NGOMO 13-Aug-20

11.50

10.50

0.00

NGOMO 3-Sep-20

11.50

10.90

(0.25)

NGOMO 1-Oct-20

11.65

10.50

(0.10)

NGOMO 3-Nov-20

11.75

10.75

0.50

NGOMO 1-Dec-20

11.75

10.85

(0.10)

NGOMO 5-Jan-21

11.70

11.10

0.25

 

Benchmark NTBills

Description

Bid (%)

Offer (%)

Day Change (%)

NIGTB 2-Apr-20

5.00

1.00

0.00

NIGTB 2-Jul-20

6.00

1.00

(1.00)

NIGTB 1-Oct-20

7.00

2.00

0.00

NIGTB 14-Jan-21

7.00

2.00

0.00

                                                                          


Money Market

The interbank rates remained stable at single-digit figures, with the market still awash with liquidity. OBB and OVN rates closed at 2.40% and 2.90% respectively.

 

With c.920bn of maturing OMO bills expected to flow into the market, we expect rates to remain to dip slightly despite the possibility of an OMO auction. 

 

Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

2.40

2.29

Overnight (O/N)

2.90

3.07

 


FX Market

At the Interbank, the Naira/USD spot and SMIS rate remained unchanged at N306.95/$ and N358.51/$ respectively. The Naira depreciated at the I&E FX window, gaining 19k to close at N364.52/$.


The parallel market, the cash rate appreciated by 20k to close at N358.30/$, while the transfer rate also remained stable at N367.00/$.

 

Eurobond

The bears were still out in today's NGERIA Sovereign session, as we continued to see better offers across the sovereign yield curve. With a c.2.36% D/D dip in crude oil prices, investors continued to sell-off, as they trade global market sentiment. Yields expanded by c.12bps across the sovereign yield curve.

                    

The NGERIA Corps tickers continued it mixed sentiment, with yields on the ACCESS 2021s weakening by c.14bp, while the FIDBAN 2022s and ETINL 2024s dipped by c.1bp and c.3bps respectively.


Proshare Nigeria Pvt. Ltd.

 

Proshare Nigeria Pvt. Ltd.

 

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Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.

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