Investors Renew Demand for Long Tenured FGN Bonds

Proshare

Monday, July 29,  2019  07:00AM / Zedcrest Capital 

 

 

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

 

Bonds

The FGN Bond market traded on a slightly weaker note, as spreads widened on the short end of the curve, following a slowdown in client demand interests. We however witnessed renewed interests for the long tenured bonds, with significant demand witnessed especially on the 2037 bonds which declined by c.20bps on the day. Overall, yields were marginally higher by c.4bps on the day.

 

We expect yields to remain relatively stable in the near term, as investors maintain hunt for yields on the long end of the sovereign curve.

 

 

Benchmark FGN Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

14.50 15-Jul-21

13.30

12.42

0.56

16.39 27-Jan-22

13.12

12.25

0.20

12.75 27-Apr-23

13.43

12.92

0.00

14.20 14-Mar-24

13.59

12.61

0.03

13.53 23-Mar-25

13.57

12.76

0.00

12.50 22-Jan-26

13.92

13.56

(0.01)

16.29 17-Mar-27

13.89

13.67

0.05

13.98 23-Feb-28

13.87

13.59

0.00

12.15 18-Jul-34

14.07

13.87

(0.05)

12.40 18-Mar-36

14.03

13.92

(0.05)

16.2499 18-Apr-37

13.86

13.70

(0.21)

14.80 26-Apr-49

14.05

14.02

(0.05)


Source: Zedcrest Dealing Desk

 

 

 

 

Treasury Bills

The T-bills market opened on a weaker note, as the depressed system liquidity levels forced some selloffs on the short end of the curve. The Market however improved slightly towards the close of the session, as inflows from FAAC payments during the session bolstered system liquidity into positive territory.

 

We expect yields to trend lower tomorrow, due to the improved system liquidity in the money market.

 

 

Benchmark Treasury Bills

Description

Bid (%)

Offer (%)

Day Change (%)

12-Sep-19

10.90

10.00

0.45

3-Oct-19

10.90

10.25

0.50

14-Nov-19

11.00

10.55

0.60

5-Dec-19

10.80

10.60

(0.35)

2-Jan-20

11.10

11.00

(0.10)

6-Feb-20

11.15

10.70

(0.05)

19-Mar-20

11.15

10.60

0.00

2-Apr-20

11.15

10.95

(0.05)

14-May-20

11.10

10.85

(0.15)

04-Jun-20

11.20

10.65

0.00

Source: Zedcrest Dealing Desk


 

Money Market

Rates in the money fell by c.9pct as inflows from FAAC payments bolstered system liquidity. The OBB and OVN rates consequently ended the session at 13.14% and 14.29%, with system liquidity now estimated at c.N220bn positive.

 

We expect rates to trend lower tomorrow, due to the improved system liquidity levels.

 

Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

13.14

21.86

Overnight (O/N)

14.29

23.21

Source: FMDQ, Zedcrest

 

 

 

FX Market

At the interbank, the Naira/USD rate declined by 5k to N306.85/$ at the spot market and by 2k to N357.68/$ in the SMIS window. The NAFEX closing rate at the I&E window declined by 10k to N361.87/$, whilst the cash and transfer rates at the parallel market remained stable at N357.50/$ and N362.00/$ respectively.

 

FX Market

 

Current (N/$)

Previous ( N/$)

CBN Spot

306.85

306.90

CBN SMIS

357.68

357.70

I&E FX Window

361.87

361.97

Cash Market

357.50

357.50

Transfer Market

362.00

362.00

Source: CBN, FMDQ, REXEL BDC 

 

 

 

Eurobonds

The NGERIA Sovereigns weakened further in today’s session, with yields trending higher by c.8bps on the day.

 

The NGERIA Corps remained relatively stable, with demand still firm across most tickers.

 

 

Proshare Nigeria Pvt. Ltd.



Proshare Nigeria Pvt. Ltd.

 

 

Related News

1.       Bullish Run Halts as Average Yield Advanced 54bps WoW on Tight System Liquidity

2.      FMDQ OTC Holds 7th AGM, Achieves 22% Turnover From Trading Activities in 2018 FY

3.      Traders Take Profit on Nigerian Eurobonds Ahead of US FED Rate Decision

4.      Summary of FGN Bond Auction Results For July 2019

5.      July 2019 FGN Bond Auction Oversubscribed

6.      FGN Bond Yields Compress Following Robust Auction Demand

7.      Market Players Oversubscribe FGN Bond Auction by c.200%

8.     Market Players Place Bullish Bets on FGN Bonds Ahead of MPC

9.      Average Yield Pressured to 10.5% on Sustained Demand Buoyed by Robust System Liquidity

10.  Bond Yields Retrace Higher Following Q3 FGN Bond Calendar Release


Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

READ MORE:
Related News
SCROLL TO TOP