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CBN to Sell N149bn Treasury bills in its first PMA for the year

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Tuesday, January 2, 2018 7:00PM / @ZedcrestCapital 

*** Oil posts strongest year opening since 2014 amid Iran unrest***

Proshare Nigeria Pvt. Ltd.

Bonds

The bond market opened the year on a very quiet note, with some sell witnessed on the 2021 bond due to the relatively higher valuation of the bond. We consequently witnessed a slight uptick in yields on the short end of the curve, whilst the long end retraced slightly downwards from some profit taking witnessed in the last three trading sessions of the previous year. Average bond yields consequently compressed by 2bps to 13.99%. We expect the market to be relatively quiet tomorrow, but with slight demand expected on the long end of the curve.

 Proshare Nigeria Pvt. Ltd.

 

Treasury Bills

The T-bills market also traded on a quiet note, but with slight compression in yields due to anticipation of sizable subscriptions at the PMA scheduled for tomorrow. The CBN continued its PMA auction in today’s session, selling a total of N58bn of the 79-day and 198-day bills at 12.75% and 14.55% respectively. We expect the market to be relatively quiet tomorrow, with market players expected to focus on the PMA.

 Proshare Nigeria Pvt. Ltd.

Money Market

The OBB and OVN rates remained relatively stable to close today at 4.67% and 5.50%, with system liquidity estimated to close at c.N380bn positive, following debits for the OMO T-bill and Wholesale SMIS by the CBN.  We expect rates to remain stable tomorrow, as market players anticipate inflows from OMO maturities (N193bn) on Thursday.

  Proshare Nigeria Pvt. Ltd.

FX Market

The CBN Official spot rate appreciated by 0.16% to open the year at N305.50/$, while rates at the Investors and exporters FX window depreciated by 0.19% to N361.00/$. Rates at the parallel market however appreciated by N1.00 to close at N362.50/$. 

Proshare Nigeria Pvt. Ltd.


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3.      Bond yields rise above 14% with slight profit taking on the 20-yr

4.      Slight uptick in Bond Yields amid Profit Taking on the 10-yr

5.      Funding Rates remain Stable as system liquidity closes positive

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7.      CBN Sells N355bn OMO bills to mop up Excess System Liquidity

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