Proshare - Facebook Proshare - Twitter Proshare - Google+ Proshare - Linked In Proshare - RSS Feed

Bond Market Reverses Prior Session Loss ahead of Auction

Proshare

Tuesday, May 22, 2018 / 07:42 PM / Zedcrest Capital

*** CBN MPC maintains rates to ‘get more clarity’***

Proshare Nigeria Pvt. Ltd.

 

Bonds

The Bond market opened the week on a weaker note, with yields rising higher by c.14bps. This was following fears of continued selloff from offshore investors which pushed bid prices significantly lower, despite the relatively scanty volumes traded. We witnessed the most selloff on the 2027s and 2034s, which rose by as much as 7bps (-0.40pt). We expect yields to moderate slightly in the near term, with slight pullback in yields expected at these levels.


Proshare Nigeria Pvt. Ltd.

 

NB: (1) The DMO reserves the right to alter the amount allotted in response to market conditions.  

(2) Additional sum of N14.985 Billion 13.53% FGN MAR 2025 & N14.985 Billion 13.98% FGN FEB            2028 will be allotted on non-competitive basis.

Treasury Bills

The T-bills market traded with mixed sentiments, opening on a slightly bullish note with some demand on the longer end of the curve. We however saw some selloff on the shorter end of the curve as some banks were looking to generate liquidity to fund their positions. Yields consequently compressed by c.7bps on average. We expect yields to trend slightly lower tomorrow, as market players anticipate inflows of c.N267bn from OMO maturities on Thursday.

 

 Proshare Nigeria Pvt. Ltd.


Money Market

The OBB and OVN rates rose slightly higher to 17% and 18%, despite the slight improvement in system liquidity to c.N81bn positive. This was as most banks were takers in the interbank market, consequently keeping the lending rate slightly above the benchmark SLF rate of 16%. We expect rates to moderate slightly in anticipation of inflows from OMO T-bill maturities on Thursday. Further liquidity expectations however remain tight due to expected outflows for Retail FX sales and bond auction debits for Friday.

 

Proshare Nigeria Pvt. Ltd.


FX Market

The Interbank rate depreciated by 0.02% to N305.90/$. This was following a slight drop in the CBN’s FX reserves by c.$50m down to $47.75bn as the CBN maintained its interventions in the various market segments to ensure stability of the USD/Naira rates amid offshore selloff on assets. The NAFEX rate appreciated marginally by 0.02% to N361.41/$, with offshore demand for dollars still persistent in the market. Rates in the Cash market depreciated by 0.14% to N363.50/$, while the Transfer market remained stable at N365.00/$.

 

Proshare Nigeria Pvt. Ltd.

Eurobonds:

The NGERIA Sovereigns showed slight recovery from the bearish sentiments witnessed in previous sessions, as investors sentiments turned moderately bullish across the curve. We witnessed the most interest on the 2032s and 2038s which gained +0.60pt and +0.80pt respectively.

 

Trading in the NGERIA corps were mixed, with most volumes on the SEPLLN 23s and the Zenith and UBANL 22s. While the SEPLLN 23s and UBANL 22s were mostly bearish, the Zenith 22s posted marginal gains of c.0.10pt.

 

 

 Proshare Nigeria Pvt. Ltd.





Proshare Nigeria Pvt. Ltd.

 

 

Related News

1.       Bond Yields Tick Higher as GDP Growth slows in Q1 2018

2.       Offshore Sellers Move Bond Yields higher ahead of CBN MPC Meeting

3.       Market Players Under-subscribe CBN OMO due to System Liquidity Strain

4.       Interbank FX rate rises amid Slowdown in Reserve Accretion

5.       Funding Rates Crash Below 20% as CBN SLF hits 6-Month high at N239bn

6.       Invest in FGN Monthly Bond Auction – May 2018

7.       Funding Rates Spike to 1-yr High as CBN Further Tightens Liquidity with FX Sale

8.       Funding Rates Spike to 7-Month High as Banks Fund for their Retail FX Bids

9.       Funding Rates Spike as CBN Mops up System Liquidity with c.N454bn OMO Sale

10.   Buhari Requests Senate Approval on Promissory Note and Bond Issuance to Settle Inherited Local Debts

11.   NAFEX Rate hits 4-Month High amid Offshore Selloff

12.   Renewed Offshore Selloff Lifts Bond yields by c.25bps

13.   Funding Rates Spike to One Month High Amid CBN FX Interventions

 

READ MORE:
Related News