Bond Yields Trade Flat as Short Dated Demand Interests Persist

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Friday, July 05, 2019   /  05:00PM  /  Zedcrest Capital


Below are the highlights of trading activities in the fixed income and forex market today.

 

Bonds

The FGN Bond market closed the week on a relatively flat note, but with some firm demand interest still observed around the mid tenors (27s -29s). Average bond yields were consequently unchanged on the day at c.14.21%.

We expect yields to remain relatively stable in the near term, but with some profit taking bias expected from dealers at current levels.

 

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Treasury Bills

The T-bills market remained slightly bullish, with the most interests witnessed on the long end of the curve, whilst other maturities were scantily traded as banks funded for the retail FX auction by the CBN. Yields consequently compressed by c.10bps on the day.

We expect yields to remain relatively stable opening the new week, barring a renewed OMO sale by the CBN.


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Money Market

Rates in the money market remained relatively stable as system liquidity remained significantly robust at c.N500bn est., despite the Retail SMIS by the CBN. The OBB and OVN rates consequently ended the session at 3.86% and 4.57% respectively.

We expect rates to remain relatively stable opening the new week, barring a renewed OMO sale by the CBN.


Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

3.86

4.14

Overnight (O/N)

4.57

4.86

Source: FMDQ, Zedcrest

  

FX Market

At the interbank, the Naira/USD rate remained stable at N306.95/$ (spot) and N357.53/$ (SMIS). The NAFEX rate at the I&E window rose further by 6k to N360.82/, while the cash and transfer rates at the parallel market remained stable at N358.60/$ and N362.50/$ respectively.

 

FX Market

 

Current (N/$)

Previous (N/$)

CBN Spot

306.95

306.95

CBN SMIS

357.53

357.53

I&E FX Window

360.82

360.76

Cash Market

358.60

358.60

Transfer Market

362.50

362.50

Source: CBN, FMDQ, REXEL BDC

  

Eurobonds

The NGERIA Sovereigns retraced slightly from its firm bullish trend, with yields ticking higher by c.5bps on the day.

Demand interests remained robust on the NGERIA Corps, with continued price gains witnessed across most traded tickers. The Most demand interests remained on the ACCESS 21s, FIDBAN 22s and ETINL 24s.


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 Proshare Nigeria Pvt. Ltd.


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Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.

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