T-BILL Yields Spike by c.70bps Following Renewed Offshore Selloff

Proshare

Friday, August 09, 2019 / 07:00 AM / By Zedcrest Capital / Header Image Credit: Nairabarter


The T-bills market traded on a significantly bearish note, as yields spiked by c.70bps, following renewed selloffs by offshore investors across the curve. Local market players also remained risk off following the renewed OMO issuance by the CBN in the previous session. Bid yields across most of the curve are now at the c.12.00% mark from c.11.50% in the previous session.

 

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

 

Bonds


The FGN Bond market traded on a relatively calm note, as there was no further OMO issuance by the CBN in the money market. Yields consequently compressed slightly on the short to mid end of the curve. We however continued to witness some selling interests push yields marginally higher on the longer duration bonds.

 

We expect yields to close the week on a relatively calm note, having been already significantly beaten in the week to date. This is however barring a renewed OMO issuance by the CBN which could elevate short term bond yields.


Proshare Nigeria Pvt. Ltd.

 


Treasury Bills


We experienced a bearish trend in the T-bills market today. 

We expect yields in the T-bills market to remain slightly pressured in the near term, due to continued selloffs by offshores and the relatively tighter system liquidity levels occasioned by the CBN’s continued FX interventions in the I&E market.


Proshare Nigeria Pvt. Ltd.


 

Money Market

Rates in the money market inched higher by c.4pct, despite the c.N109bn inflows from maturing OMO bills. This was majorly due to a decline in system liquidity from the continued FX interventions by the CBN. The OBB and OVN rates consequently ended the session at 11.43% and 12.57%, with system liquidity currently estimated at c.N60bn long.

 

We expect rates to remain at current double digit levels, due to the relatively tighter system liquidity levels.

 

Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

11.43

9.00

Overnight (O/N)

12.57

9.79

Source: FMDQ, Zedcrest

 

 

FX Market


At the interbank, the Naira/USD rate remained unchanged at N360.90/$ (Spot) and N357.68/$ (SMIS). The NAFEX rate at the I&E window rose by 48k to a 6-month high of N363.31/$ due to continued profit taking on T-bills by offshore investors. At the parallel market, the cash and transfer rates remained stable at N357.50/$ and N362.00/$ respectively.

 

FX Market

 

Current (N/$)

Previous ( N/$)

CBN Spot

306.90

306.90

CBN SMIS

357.68

357.68

I&E FX Window

363.31

362.83

Cash Market

357.50

357.50

Transfer Market

362.00

362.00

Source: CBN, FMDQ, REXEL BDC

 


Eurobonds


The NGERIA Sovereigns remained relatively stable, with slight price gains witnessed on the mid to long end of the curve.

 

The NGERIA Corps were relatively stable, but with slight sell interest still witnessed on the ETINL 24s (6.19/6.08).

 

Proshare Nigeria Pvt. Ltd.

 

 


Proshare Nigeria Pvt. Ltd.


 

Related News

1.       Treasury Yields Trend Higher, as CBN Resumes OMO Auction

2.      FMDQ Transits To A Full-fledged Securities Exchange

3.      FGN Bond Yields Tick Higher, As Offshore Investors Resume Profit Taking

4.   Average Yield on T-Bills Instruments Marginally Advances to 11.2% Amidst Absence of OMO       Auctions

5.      August 2019 FGN Savings Bonds Offer for Subscription

6.      Nigerian Eurobonds Dip Following Less Dovish US FED Stance

7.      Bond Yields Moderate Further Amid Continued Local Demand

8.      NAFEX Rate Hits Five Month High on Lower FPI Inflows

9.      Investors Renew Demand for Long Tenured FGN Bonds

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

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


Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.

READ MORE:
Related News
SCROLL TO TOP