Bonds & Fixed Income | |
Bonds & Fixed Income | |
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Wednesday, March 18, 2020 / 07:05 PM / By Zedcrest Capital / Header Image Credit: BusinessDay
Below are highlights of trading activities in the fixed income and forex market on March 17, 2020
FGN Bonds
The Bonds
Market continued its bullish trend, as yields continue to rally across the bond
curve. The mid (2027s) to long-end (2049s) continued to have the most
buy-interest, as market players reinvested bond coupon payments of c.N140bn. Yields
dropped by c.11bps across the benchmark bond curve.
The
Nigerian Bureau of Statistics released Inflation Figures for February 2020,
with inflation rate standing at 12.20%, a 0.07% rise from January 2020. Food
inflation, which continues to be the main driver of the hike, rose to 14.90%, a
0.05% rise from the preceding month (14.85%), while core inflation rose to
9.43% from 9.35% recorded in January 2020.
We expect
to see improved bids in tomorrow's session, as more tranches of bond coupon
payment reinforces investors' buy-interest in bond maturities.
Benchmark FGN Bonds |
||||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
|
14.50 15-Jul-21 |
8.37 |
6.74 |
(0.32) |
|
16.39 27-Jan-22 |
10.31 |
8.10 |
(3.53) |
|
12.75 27-Apr-23 |
10.80 |
10.06 |
0.00 |
|
14.20 14-Mar-24 |
12.57 |
10.21 |
(1.63) |
|
13.53 23-Mar-25 |
12.70 |
11.19 |
(1.40) |
|
12.50 22-Jan-26 |
13.24 |
12.49 |
(1.05) |
|
16.29 17-Mar-27 |
13.49 |
12.56 |
(0.57) |
|
13.98 23-Feb-28 |
12.95 |
12.52 |
(1.20) |
|
12.15 18-Jul-34 |
13.76 |
12.54 |
(0.74) |
|
12.40 18-Mar-36 |
13.08 |
12.45 |
(0.93) |
|
16.2499 18-Apr-37 |
12.85 |
12.40 |
(1.16) |
|
14.80 26-Apr-49 |
12.88 |
12.06 |
(1.13) |
|
Treasury Bills
The
Treasury Bills Market continued its bullish trend in today's market, as bids slightly
improved on OMO maturities across the curve. Demand was largely skewed to the
mid-end of the OMO curve (Sep/Oct), as market players' reinvested OMO
maturities of c.N300bn at tenor to maturities they were most comfortable at. Yields
dipped by an average of c.3bps across the benchmark OMO curve.
Similarly,
The NTB side continued its bullish run, as local investors locked-in excess
funds at the long-end of the NTB curve. Yields compressed by an average of c.18bps
across the benchmark NTB curve.
We expect
to see sustained buy-interest on mid-tenured OMO bills in tomorrow's session,
as investors look to lock-in excess funds via OMO maturities coming in on
Thursday. We also anticipate the NTB side to be quiet, as local players look to
the outcome of the T-bills PMA scheduled tomorrow.
NTB - 18 Mar 2020 | | ||
Tenor | Offer
(N'bn) | Expected
Rate (%) | Previous
Rate (%) |
91 days | 2.00 | 2.00-2.50 | 2.49 |
182
days | 8.39 | 3.20-3.80 | 3.78 |
364
days | 37.18 | 5.00-6.00 | 5.30 |
Benchmark
OMO Bills |
|||
Description |
Bid (%) |
Offer
(%) |
Day
Change (%) |
NGOMO 2-Apr-20 |
18.00 |
13.00 |
0.00
|
NGOMO 14-May-20 |
18.00 |
13.00 |
0.00
|
NGOMO 4-Jun-20 |
18.00 |
13.00 |
0.00
|
NGOMO 2-Jul-20 |
18.00 |
13.00 |
0.00
|
NGOMO 13-Aug-20 |
18.00 |
13.00 |
0.00
|
NGOMO 3-Sep-20 |
18.00 |
13.00 |
0.00
|
NGOMO 1-Oct-20 |
17.60 |
13.00 |
(0.40) |
NGOMO 3-Nov-20 |
18.00 |
13.00 |
0.00
|
NGOMO 1-Dec-20 |
18.00 |
13.00 |
0.00
|
NGOMO 5-Jan-21 |
18.00 |
15.50 |
0.05 |
NGOMO 02-Feb-21 |
18.00 |
13.00 |
0.05 |
Benchmark
NTBills |
|||
Description |
Bid (%) |
Offer
(%) |
Day
Change (%) |
NIGTB 2-Apr-20 |
2.70 |
1.00 |
0.00
|
NIGTB 2-Jul-20 |
3.60 |
1.00 |
0.00
|
NIGTB 1-Oct-20 |
5.00 |
2.00 |
0.00
|
NIGTB 12-Nov-20 |
5.25 |
2.00 |
(0.25) |
NIGTB 14-Jan-21 |
5.70 |
2.00 |
(0.30) |
NIGTB 11-Feb-21 |
6.00 |
2.50 |
(0.50) |
Money Market
System
Liquidity opened with c.N266.11bn positive, as more tranches of the bond coupon
payment flowed into the system. OBB and OVN rates closed lower at 11.71% and 12.64%
respectively, as rates dropped by c.600bps D/D.
We expect
rates to dip slightly in tomorrow's session, as another tranche of bond coupons
further bolsters system liquidity.
Money Market Rates |
||
|
Current (%) |
Previous (%) |
Open Buy Back
(OBB) |
11.71 |
17.40 |
Overnight (O/N) |
12.64 |
18.10 |
FX Market
At the Interbank,
the Naira/USD spot rate depreciated by N5 to close at N307.00/$, while the SMIS
rate remained unchanged at N358.51/$. At the I&E FX window, the Naira appreciated
against the dollar by 21k to close at N367.57/$.
At the
parallel market, cash and transfer rates depreciated by N2 and N5 to close at
N378.00/$ and N410.00/$ respectively.
FX Market |
||
Current (N/$) |
Previous ( N/$) |
|
CBN Spot |
307.00 |
306.95 |
CBN SMIS |
358.51 |
358.51 |
I&E FX
Window |
367.57 |
367.78 |
Cash Market |
378.00 |
376.00 |
Transfer Market |
410.00 |
405.00 |
Eurobond
The NGERIA Sovereign tickers continued its
bearish course, as yields continue to weaken across the curve. We noticed more Investors
exit their long positions in droves across the curve, as Oil prices nose-dive
to $30.98 per barrel, fueled by the wide-spread Coronavirus pandemic. Yields spiked
by an average of c.54bps across the benchmark sovereign curve.
Similarly,
the NGERIA Corps tickers traded on a
bearish note, as yields continue to weaken among most tracked papers. The ACCESS
2021s and ETINL 2024s weakened by c.107bps and c.129bps respectively.
Related News
1.
Treasury Bill
Auction Holds On Wednesday March 18th, 2020
2.
Bond Coupon
Payment of c.N140bn Sparks a Slight Recovery in the Bonds Market
3.
Average Yield
Dips Marginally to 3.9% Amidst Oil Price Decline
4.
The Bears
Reigned Unhinged in the Fixed Income Market
5.
Interbank Rates
Plunge as FX Retail Refund Impacts Positively on System Liquidity
6.
Axxela Funding 1
Plc - Up to N10bn Series 1 Bonds Issuance Coming Soon
7.
Bearish
Sentiment Persists in the Fixed Income Space, as DMO Drops Rates at the T-Bills
PMA
8. DMO Revises Bond
Auction Calendar, Issues New 15-year (2035s) and 50-year Bond (2050s)
Maturities
9. FCMB Announces
Issuance of Commercial Paper of up to N20bn by First City Monument Bank Limited
10.
NSE Lists FGN
Savings Bond Issued in February 2020