Thursday, January 25, 2018 10.17PM /Zedcrest Capital
***Nigeria Plans $2.5 Billion Eurobond Sale in First Quarter to Refinance Domestic Debt***
***Seeks to return to JPMorgan’s local-currency bond index***
The Bond market opened on a relatively calm note, following the relatively moderate results from the previous day’s auction. The market however turned bullish as updates from an interview granted by the DMO Chief filtered into the market, fueling some panic buys especially on the long end of the curve, with the 2037s bond the most hit, (traded as low 13.00%). Yields however retraced slightly from their intra-day highs, to close c.11bps lower than their previous day levels, as market players shrugged off the initial anxiety following the press release. We expect continued demand, but on a more moderate tone, as market players asses the relative impact of the DMO’s prospective decisions.
The OBB and OVN rates remained relatively unchanged from its previous day’s levels, closing at 14.67% and 15.50%. We expect rates to trend downwards tomorrow, possibly to single digit levels, as inflows from FAAC payments are expected to more than offset outflows for bond auction settlement. The above is however barring a significant OMO sale by the CBN