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

Proshare

Monday, May 14, 2018 / 06:50 PM / Zedcrest Capital

***World Bank unveils fresh N2.7 trillion investment strategy in Nigeria for 2019***

Proshare Nigeria Pvt. Ltd.

Bonds

The bond market opened the week on a relatively calm note, as it eased off slightly from the selling pressures witnessed in the previous week. Yields consequently declined by c.8bps on average, with most trades done on the 2021 and 2034 bonds. We expect yields to compress slightly in the near term, as market players anticipate a further decline in inflation in the CPI report to be published Thursday.

 

 
Proshare Nigeria Pvt. Ltd.

Treasury Bills

The selling pressures in the T-bills space also moderated slightly, as some local and offshore investors began cherry-picking on some of the higher yielding bills, consequently absorbing most of the sell off from the local banks who were looking to generate more liquidity for funding of their wholesale FX bids and trade positions. We expect yields to decline further ahead of the next OMO T-bill maturity, as they are relatively attractive at current levels, with most of the bills being offered at c.60 - 90bps above the last OMO rate.

 

Proshare Nigeria Pvt. Ltd.


Money Market

The OBB and OVN rates spiked to a 1-yr high of 150% and 164.17%, as system liquidity which opened at c.N2bn short was further compressed by an FX intervention by the CBN ($210m) for wholesale, SME and Invisible transactions. We expect rates to moderate slightly tomorrow, as there are no significant outflows expected from the system.

 

Proshare Nigeria Pvt. Ltd.


FX Market

The Interbank rate remained stable at its previous rate of N305.80/$, even as the CBN intervened in the market with a total sale of $210m. The NAFEX closing rate depreciated sharply by 0.14% to a YTD high of N361.57/$. Rates in the Unofficial market also depreciated by 0.06% to N361.70/$.


Proshare Nigeria Pvt. Ltd.

 

Eurobonds:

The NGERIA Sovereigns remained slightly bullish, with yields compressing by c.2bps across the curve. We witnessed most trades on the 2027s and 2038s which gained +0.30pt on average.

 

The NGERIA Corps were also bullish with interests mostly on the longer dated tickers. The UBANL 22s, FIDBAN 22s and SEPLLN 23s were the highest gainers as their yields declined by c.10bps on average, with average price gains of +0.40pt.

 

 Proshare Nigeria Pvt. Ltd.





Proshare Nigeria Pvt. Ltd.

 

Related News

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

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

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

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

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

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

7.       May 2018 FGN Savings Bonds Offer for Subscription

8.       Bond Yields rise to 3-Week High amid Profit taking by Offshore on the 20-yr

9.       The Returning Foreign FI Investor

10.   CBN Sells N600bn T-bills to Mop up Excess Inflows from Maturing Bills

11.   N95bn T-bills PMA gets Oversubscribed by 420% as Stop rates crash by c.100bps

12.   CBN to Auction N95bn Treasury Bills after Mayday Break

13.   Buying Interest to Sustain Bullish Trend Ahead of PMA

14.   Market Players Trade with Mixed Sentiments amid OMO Uncertainty

15.   April 2018 FGN Bond Auction - Total Subscription Was N262.48bn, A Subscription Rate of 292%.

16.   Another Auction In Line With The Script

READ MORE:
Related News
SCROLL TO TOP