Culled—Proshare
March 16, 2020
By Zedcrest Capital
FGN Bonds
Despite the downward spiral of crude oil prices, the Bonds Market breathed a sigh of relief, as bids improved across the bond curve, halting the sell-off noticed over several days. The mid-end had the most axes (2027s, 2028s), as bond coupon payments of c.N140bn gave some liquidity respite to local investors. Yields compressed by an average of c.50bps across the benchmark bond curve.
We expect a quiet market in tomorrow’s session, as attention shifts The Nigerian Bureau of statistics’ release of inflation report for February.
| Benchmark FGN Bonds | ||||
| Description | Bid (%) | Offer (%) | Day Change (%) | |
| 14.50 15-Jul-21 | 8.69 | 6.94 | (0.87) | |
| 16.39 27-Jan-22 | 13.84 | 6.52 | (0.01) | |
| 12.75 27-Apr-23 | 10.80 | 9.99 | (3.16) | |
| 14.20 14-Mar-24 | 14.20 | 10.01 | 0.17 | |
| 13.53 23-Mar-25 | 14.10 | 11.19 | 0.15 | |
| 12.50 22-Jan-26 | 14.29 | 12.12 | (0.28) | |
| 16.29 17-Mar-27 | 14.06 | 13.06 | (0.35) | |
| 13.98 23-Feb-28 | 14.15 | 13.21 | (0.26) | |
| 12.15 18-Jul-34 | 14.50 | 13.02 | (0.10) | |
| 12.40 18-Mar-36 | 14.01 | 12.48 | (0.86) | |
| 16.2499 18-Apr-37 | 14.01 | 12.70 | (0.68) | |
| 14.80 26-Apr-49 | 14.01 | 12.76 | (0.30) | |
Treasury Bills
The Treasury Bills Market opened the new trading week on a slightly bullish note, as bid slightly improved from last week’s close. Attention shifted to short- to mid-end of the OMO curve (May and Sept), as supply from offshore investors was equally matched by locals, who saw yields at that Duration to Maturity as attractive. Yields dipped by an average of c.26bps across the benchmark OMO curve.
Similarly, The NTB side saw some bullish sentiment, as we noticed pocket-sized demand on the mid-end of the NTB curve, as banks looked to fill-in customer requests. Yields compressed by an average of c.19bps across the benchmark NTB curve.
We expect the bullish sentiment to persist in the interim, as market players look to reinvest c.N300bn of maturing OMO maturities to stem the bearish tide seen in the last couple of days.
| Benchmark OMO Bills | |||
| Description | Bid (%) | Offer (%) | Day Change (%) |
| NGOMO 19-Mar-20 | 18.50 | 13.50 | 0.00 |
| NGOMO 2-Apr-20 | 18.00 | 16.75 | (0.50) |
| NGOMO 14-May-20 | 18.00 | 11.00 | 1.50 |
| NGOMO 4-Jun-20 | 18.00 | 10.50 | (0.50) |
| NGOMO 2-Jul-20 | 18.00 | 10.50 | (0.50) |
| NGOMO 13-Aug-20 | 18.00 | 11.00 | (0.50) |
| NGOMO 3-Sep-20 | 18.00 | 17.00 | (0.50) |
| NGOMO 1-Oct-20 | 18.00 | 11.00 | (0.50) |
| NGOMO 3-Nov-20 | 18.00 | 11.00 | (0.50) |
| NGOMO 1-Dec-20 | 18.00 | 13.00 | (0.50) |
| NGOMO 5-Jan-21 | 17.95 | 15.00 | (0.55) |
| NGOMO 02-Feb-21 | 17.95 | 13.00 | (0.05) |
| Benchmark NTBills | |||
| Description | Bid (%) | Offer (%) | Day Change (%) |
| NIGTB 2-Apr-20 | 2.70 | 1.00 | (1.30) |
| NIGTB 2-Jul-20 | 3.60 | 1.00 | (0.90) |
| NIGTB 1-Oct-20 | 5.00 | 1.00 | 0.00 |
| NIGTB 12-Nov-20 | 5.50 | 1.00 | 0.25 |
| NIGTB 14-Jan-21 | 6.00 | 3.00 | 0.30 |
| NIGTB 11-Feb-21 | 6.50 | 2.00 | 0.50 |
Money Market
Interbank rates spiked by c.800bps, as opening system liquidity of c.96.54bn positives, was further stifled by funding provision for FX Wholesale Debit. OBB and OVN rates closed higher to close at 17.40% and 18.10% respectively.
We expect rates to firmly remain in the double-digit corridor, as system liquidity remains tighten.
| Money Market Rates | ||
| Current (%) | Previous (%) | |
| Open Buy Back (OBB) | 17.40 | 9.17 |
| Overnight (O/N) | 18.10 | 10.08 |
FX Market
At the Interbank, the Naira/USD spot and SMIS rate remained unchanged at N306.95/$ and N358.51/$ respectively. At the I&E FX window, the Naira depreciated against the dollar by N3.78 to close at N377.78/$.
At the parallel market, cash rates depreciated by N3 to close at N376.00/$, while the transfer rate dipped by N10 to close at N405.00/$.
| FX Market | ||
| Current (N/$) | Previous ( N/$) | |
| CBN Spot | 306.95 | 306.95 |
| CBN SMIS | 358.51 | 358.51 |
| I&E FX Window | 377.78 | 374.00 |
| Cash Market | 376.00 | 373.00 |
| Transfer Market | 405.00 | 395.00 |
Eurobond
The NGERIA Sovereign tickers traded on a bearish note, as offers strengthened across the sovereign yield curve. With oil prices plunging to $32.87 per barrel (at the time of this report), investors continued to trade oil price sentiment, despite the U.S Federal Reserve announcing a cut in interest rates to zero over the weekend. Yields spiked by an average of c.84bps across the benchmark sovereign curve.
The NGERIA Corps tickers started the week on a bearish note, as yields weakened among most tracked papers. The ACCESS 2021s weakened by c.4.22bps, having the biggest D/D spike.
