Fixed Income Market Monitor- Average Bond Yield Fell by 3bps to Close the Week At 13.97%

Proshare

Monday, August 06, 2018 / 10:10AM /Anchoria AM Research

The money market rate decreased last week as the Overnight rate (OVN) and Open Buy Back rate (OBB) fell to 5.33% and 4.33% respectively. Consequently, the average money market rate decreased by 2.21% to settle at 4.83% as system liquidity increased to cN450bn due to inflow from FAAC payment of N375bn, OMO maturity of N379bn, T-Bills maturity of N215bn and refund of the last retail auction of N225bn despite outflows from OMO Sales of N363bn, FX Wholesale, Invisibles and SME of N90bn, T-bill auction of N215bn and CBN fortnight retail auction during the week

We expect rates to inch up on Monday as banks are expected to fund for another round of FX sales in the Wholesale, Invisibles and SME Market, however with the inflow from OMO Maturity this week we expect the rates to moderate.

Proshare Nigeria Pvt. Ltd.

Forex: USD/NGN

The CBN Official rate rose by 0.02% during the week to close at N305.95/$ and the rate in the Investors and Exporters’ FX Window rose by 0.11% to close at N362.67/$. Naira at the parallel market remained unchanged to close at N360.00/$ (using the Everdon BDC Rate).

We expect rates in the parallel market to remain constant as the apex bank continues to supply FX into the market at a reduced rate and funds remain easily accessible through the NAFEX window.

Proshare Nigeria Pvt. Ltd.

Commodities

The Brent Crude oil and WTI crude oil fell by 1.45% and 0.29% to close at $73.21 per barrel and $68.49 per barrel respectively due to the increase in output of the Organization of the Petroleum Exporting Countries (OPEC) and Russia. OPEC and Russia reported an increase in their output by 300,000 and 150,000 barrels per day in July, respectively.

Other factors shaping the Oil market include the trade disputes between the United States and China which kept dragging down the oil prices and U.S. sanctions on Iranian crude oil exports.

Fixed Income

Bond

The Bond market traded on a slightly bullish note last week as demands were witnessed on some tenors, most especially 2020 and 2036 bonds. The average yield in the bond market fell by marginally by 3bps to close the week at 13.97%.

However, the bond market was relatively active last week as the total value of transactions rose to N176.8 billion from N118.7 billion respectively in the previous week.

Secondary Market

Proshare Nigeria Pvt. Ltd.

Treasury Bills

Due to a relatively buoyant system liquidity during the week, the treasury bills market traded on a bullish note. Consequently, the average yield fell by 10 bps to close the week at 11.80%. Market activities was relatively quiet as value of transactions fell to N686.44 billion from N956.28 billion in the previous week.

During the week, CBN floated OMO on 91 days and 203 days T-Bills maturities at 11.05% and 12.15% with a total subscription of N58.95bn and N304.00bn respectively.

Also, the Central Bank of Nigeria (CBN) conducted its T-Bills Primary Market Auction on Wednesday. T-Bills worth N215.63 billion was offered, while a total of N318.16 billion was subscribed for the 91 days, 182 days and 364 days, which represents 147.55% subscription rate. However, the CBN allotted a total of N215.63 billion for 91 days, 182 days and 364 days, which represent the same amount of T-Bills maturing.

Primary Market Auction – 01 August 2018

Proshare Nigeria Pvt. Ltd.

Secondary Market

Proshare Nigeria Pvt. Ltd.

 

Related News

 

1.       Bond Yields Tick Higher as Offshore Players selloff on the Mid to Long End

2.      Lafarge Africa Plc Series 7 Commercial Paper Closes Today

3.      CBN Mops up Excess OMO Inflows as SLF Window hits a Record Zero Patronage

4.      Lafarge Africa Plc Series 7 Commercial Paper Now Open

5.      PMA Rates Trend lower as Market Players Oversubscribe the 1-yr bill by 175%

6.      Funding Rates expected to Trend Lower as c.N375bn FAAC Inflows hit the System

7.      Nigeria’s Debt Composition is Now External 30% Domestic 70%- Pat Oniha, DG DMO

8.     Liquidity Levels May Drive Rates Southwards Amid PMA This Week

9.      Fixed Income Market Monitor- Overnight Rate (OVN) Fell to 7.25% as at Last Week

10.  Bond Yields Compress following Demand on the Bond Yields

11.   DMO Publishes 2017 Debt Sustainability Analysis

12.  DMO Raises N66.9bn at the July 2018 FGN Bond Auction

13.  Bond Yields Trend Higher as Market players Cut losses on the 10-Yr

14.  Bond Yields Expected to Tick Higher following Weak Auction Results

15.   Key Message On 8.25% US$300m FBN Finance Co BV Subordinated Callable Note Due 2020

16.  Nigeria’s MPC retains benchmark rates, leans toward tighter policy

17.   Average T-Bills Rates Settle At 11.4% as June Inflation Prints At 11.2% Ahead Of MPC Meeting

18.  June 2018 Inflation figure posts at 11.23%, markets shrug in reaction

Fixed Income Market Monitor- The Open Buy Back Rate (OBB) Rose by 6.08% to 15.00% WoW

READ MORE:
Related News
SCROLL TO TOP