Slight Uptick in bond yields as CBN tightens Liquidity


Tuesday, March 06, 2017 10:10 PM /Zedcrest Capital

***CBN Boosts Forex Market with $210m***

Proshare Nigeria Pvt. Ltd.


The bond market traded on a bearish note in today’s session, with slight sell witnessed especially on the short end of the curve. This came on the backdrop of a further squeeze in system liquidity by the CBN and a relatively weak appetite for bonds in the market. We expect the market to continue to range at these levels in the near term, as market players are currently trading flat and staying risk off, whilst anticipating key indications (Q2 NTB calendar, CPI and MPC results) for future direction of rates in the market.

Proshare Nigeria Pvt. Ltd.


Treasury Bills

The T-bills market continued to trade on a relatively flat note, as the CBN continued with its OMO auction as expected. A total of N67.77bn of the 11-Oct bill was sold to market players at a stop rate of 14.40%. Market players however picked on some higher yielding bills, with yields compressing marginally by c.1bp on average. We expect some buying interests in the T-bill space tomorrow, in anticipation of c.N153bn OMO T-bill Maturities on Thursday. 

Proshare Nigeria Pvt. Ltd.



Money Market

The OBB and OVN rates inched higher to close at 12.67% and 13.42%, following the c.N68bn OMO T-bill sale and $210m FX sale by the CBN. System liquidity is consequently estimated to decline to c.N81bn positive, from c.N224bn opening today. We expect rates to remain relatively stable tomorrow, barring a significant OMO sale by the CBN.


 Proshare Nigeria Pvt. Ltd.

FX Market

The CBN Official spot rate appreciated by 0.02% to N305.80/$ from its previous rate of N305.85/$. This is following the CBN’s intervention of $210m in the Wholesale, SMEs and invisibles segment of the market.

The spot rate in the Investors and Exporters’ FX Window depreciated by 0.10% to close at N360.45/$ from N360.10/$ in the previous session.

Rates in the Unofficial market remained stable at N361.00/$. 

Proshare Nigeria Pvt. Ltd.


We witnessed some buy interests on the NGERIA sovereigns especially on the 38s and 47s which last traded at 104.25 and 102.85 before the close of the day. The yield curve consequently compressed by c.7bps on average.

We witnessed mixed trading sentiments on the Nigerian banks, with continued buying interests on the Diamond 19s and FBNL 20s while investors sold off on the Fidbank 18s, and the FBNNL and ECOTRA 21s.

Senegal launched its EUR 10Y and USD 30Y bonds today at 4.75% and 6.75% respectively. We await another Eurobond launch by Seplat Petroleum later this week.

 Proshare Nigeria Pvt. Ltd.

 Information on all Nigerian bonds is available here

Proshare Nigeria Pvt. Ltd.

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