Slight profit taking as bond yields hit key support levels

Proshare

Monday, January 8, 2018 10:00PM / @ZedcrestCapital

***Nigeria Foreign Reserves Reach $40.4B as at Jan. 8 ***

Proshare Nigeria Pvt. Ltd.

Bonds

The Bond market traded on a relatively quiet note, with slight sell at the close of market offsetting some initial buy interests on the long end of the curve. Average bond yields consequently inched up by 3bps to 13.57%. We expect yields to trend slightly higher tomorrow, 13.60% been the expected avg. yield level. Range trading of around 13.45 - 13.65 expected in the near term, as market players anticipate the  December CPI and Bond Issuance calendar for further clarity on expected yield directions.


Proshare Nigeria Pvt. Ltd.

 

Treasury Bills

The T-bills market was slightly bearish in today’s session due to the tight liquidity in the system. The OMO auction by the CBN was also undersubscribed with a total of c.N47bn sold of the N150bn offered by the CBN. We expect the market to remain relatively flat due to the continued OMO issuance by the CBN.


Proshare Nigeria Pvt. Ltd.

 

Money Market

The OBB and OVN rates remained relatively stable to close today at 18.00% and 18.92%. System liquidity is however estimated to decline to c.N38bn negative due to the OMO and Wholesale SMIS by the CBN. We expect rates to close slightly higher tomorrow, due to expected OMO T-bill sales by the CBN.

 

 Proshare Nigeria Pvt. Ltd.

FX Market

The CBN Official spot rate appreciated by 0.02% to N305.90 from its previous day rate of N305.95/$. Rates at the Investors and exporters FX window also appreciated by 0.05% to N361.14/$. Rates at the parallel market however depreciated by 0.17% to N361.30/$.

 

 Proshare Nigeria Pvt. Ltd.


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4. Bond yields drop 20bps with significant demand for the 10- and 20-yr

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6. CBN to Sell N149bn Treasury bills in its first PMA for the year

7. Ahead of Next T-bills Auction Scheduled for 3rd January, 2018

8. Bond Yields Closed the Year at 14% as Market Players Repriced the 20-Yr Lower

9. Bond yields rise above 14% with slight profit taking on the 20-yr

 

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