Offshore Investors Rally 10-Year Bond following Decline in CPI Inflation

Proshare

Monday, July 15, 2019   /  07:00PM  /  Zedcrest Capital / Header Image Credit: 360 Forex Trader

 

Below are the highlights of trading activities in the Fixed Income and Forex Market today.

 

Bonds

Demand Interests remained stable in the FGN bond space, with yields relatively unchanged on the day, as market players remained cautious ahead of the Q3 FGN Bond Calendar release. We however witnessed some offshore interest around the 10-Year bucket, with yields lower by c.26bps on the 2028s, following the 18bps decline in the Headline Inflation Index released earlier in the day. 

We expect the market to remain slightly bullish, with demand interests expected to be sustained from the c.N100bn bond coupon payments this week.

 

Benchmark FGN Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

14.50 15-Jul-21

13.70

12.89

0.08

16.39 27-Jan-22

13.71

13.11

(0.03)

12.75 27-Apr-23

13.72

13.25

(0.14)

14.20 14-Mar-24

13.74

13.37

0.00

13.53 23-Mar-25

14.21

13.74

0.29

12.50 22-Jan-26

14.31

13.87

0.13

16.29 17-Mar-27

14.03

13.91

(0.07)

13.98 23-Feb-28

13.99

13.91

(0.26)

12.15 18-Jul-34

14.35

14.12

0.00

12.40 18-Mar-36

14.30

14.10

0.00

16.2499 18-Apr-37

14.27

14.08

(0.05)

14.80 26-Apr-49

14.35

14.12

0.00


Source: Zedcrest Dealing Desk
 

 

Treasury Bills

The T-bills market remained bullish, with yields lower by c.20bps on the day, as demand interest were bolstered by the surplus system liquidity levels and continued lack of OMO auction by the CBN. Demand interests remained focused around the mid to long end of the curve. 

We expect yields to remain slightly bullish, as market players anticipate the c.N108bn NTB auction on Wednesday.

                 

Benchmark Treasury Bills

Description

Bid (%)

Offer (%)

Day Change (%)

18-Jul-19

10.00

5.00

0.00

1-Aug-19

10.00

5.00

0.00

12-Sep-19

10.00

9.00

(0.50)

3-Oct-19

10.50

10.00

(0.40)

14-Nov-19

11.00

10.40

(0.40)

5-Dec-19

11.00

10.40

(0.50)

2-Jan-20

11.00

10.65

(0.10)

6-Feb-20

11.15

11.00

(0.15)

19-Mar-20

11.30

11.00

(0.05)

2-Apr-20

11.30

11.00

(0.15)

14-May-20

11.30

10.80

0.00

04-Jun-20

11.30

10.80

(0.05)

Source: Zedcrest Dealing Desk 

 

Money Market

Rates in the money market remained relatively stable on the back of the robust system liquidity levels. The OBB and OVN rates consequently ended the session at 2.71% and 3.43%, with system liquidity currently estimated at c.N245bn positive. 

We expect rates to remain stable as there are no significant outflows anticipated.

 

Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

2.71

2.21

Overnight (O/N)

3.43

2.93

Source: FMDQ, Zedcrest 

 

FX Market

At the interbank, the Naira/USD rate fell by 5k to N306.95/$ (spot), with SMIS rate also lower by 2k to N357.70/$. The NAFEX rate at the I&E window rose markedly higher by 31k to N361.10/$, whilst the market turnover rose by c.70% to $161m. At the parallel market, the Cash rate dipped by 40k to N358.10/$, while the transfer rate remained stable at N361.50/$.

 

FX Market

 

Current (N/$)

Previous ( N/$)

CBN Spot

306.95

307.00

CBN SMIS

357.70

357.72

I&E FX Window

361.10

360.79

Cash Market

358.10

358.50

Transfer Market

361.50

361.50

Source: CBN, FMDQ, REXEL BDC 

 

Eurobonds

There was renewed interest in the NGERIA Sovereigns, with yields lower by c.5bps on the day. We witnessed the most interest on the long end (32s – 49s) which gained c.0.5pct during the session. 

In the NGERIA Corps, yields remained relatively stable across the traded securities.

 

 

Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd. 

 

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 Proshare Nigeria Pvt. Ltd.

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