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Bond yields drop as Senate approves the FG’s MTEF

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Tuesday, December 5, 2017 1:30PM / Zedcrest Dealing Desk 

*** Senate Passes MTEF, increases oil price benchmark to $47 ***

 Proshare Nigeria Pvt. Ltd.

Bonds

The Bond market maintained its bullish bias in today's session with demand witnessed mostly from offshore clients on the 10- and 20-yr bonds. Average bond yields consequently declined by 10bps to 14.61%, with the 2037 bond recording the highest price gain of c.70k. We expect a cautious trading session tomorrow, as market players remain skeptical of the continuation of the cut in OMO issuance by the CBN and the renewed interest from offshore clients.

 
Proshare Nigeria Pvt. Ltd.
 

Source: Zedcrest Dealing Desk 

Treasury Bills

The T-bills market also maintained its bullish bias, as market players continued to trade on the medium tenured bills (May-July), due to the continued absence of an OMO auction by the CBN in the past two sessions. Average T-bill yields consequently declined by 18bps to 17.48%, as most of the medium tenured bills began trading below 17% discount levels. We expect the bullish trend to persist, barring a resumption of OMO T-bill issuance by the CBN. 

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Money Market

The OBB and OVN rates declined further in today's session, to 16% and 16.75%, as market players anticipate inflows from FAAC and OMO maturities on Thursday. System liquidity is still estimated at c.N250bn short, with no significant inflows witnessed in the market today. We expect rates to decline slightly tomorrow, barring a significant OMO sale by the CBN.

 Proshare Nigeria Pvt. Ltd.

FX Market

The CBN Official spot rate appreciated by 0.05% to N306.85/$ from an all-time low of N307.00/$ recorded in the previous session. Rates at the Investors and exporters FX window closed at N360.50/$ from N360.32/$ in the previous session. Rates at the parallel market however stayed flat at N361.50/$.

 Proshare Nigeria Pvt. Ltd.

For more details email research@zedcrestcapital.com or call the dealing desk via 01-6311667 
 

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