December 24, 2020/Proshare
By Zedcrest Capital
FGN Bonds
Activities at the FGN bond space remained slow as yields continue to weaken D/D, with bids/offers widely dispersed on most of the benchmark maturities. The bears are getting desperate in the market, scrambling for any possible bids to offload their bonds. Offers were bettered at the belly of the curve, climbing approx. 15bps from yesterday’s level while at the tail of the curve, we saw rates jump by 40bps with offers ranging between 7.80%-7.90% levels. Bids adjusted slightly across the curve, consequently expanding by c.4bps.
We expect to see sustained supply in tomorrow’s session, albeit weak demand, as the market slides into the holiday mood.
| Benchmark FGN Bonds | ||||
| Description | Bid (%) | Offer (%) | Day Change (%) | |
| n16.39 27-Jan-22 | 2.52 | 0.35 | (0.54) | |
| 12.75 27-Apr-23 | 4.11 | 2.52 | 0.61 | |
| 14.20 14-Mar-24 | 4.47 | 3.01 | (0.03) | |
| 13.53 23-Mar-25 | 5.26 | 2.99 | (0.24) | |
| 12.50 22-Jan-26 | 6.01 | 5.00 | (0.01) | |
| 16.29 17-Mar-27 | 6.50 | 5.24 | (0.01) | |
| 13.98 23-Feb-28 | 6.50 | 5.31 | 0.00 | |
| 14.55 26-Apr-29 | 6.69 | 5.81 | (0.31) | |
| 12.15 18-Jul-34 | 7.80 | 7.33 | 0.00 | |
| 12.50 27-Mar-35 | 7.80 | 7.35 | 0.00 | |
| 12.40 18-Mar-36 | 7.80 | 7.33 | (0.01) | |
| 16.2499 18-Apr-37 | 7.81 | 7.30 | 0.02 | |
| 9.80 24-Jul-45 | 8.50 | 7.18 | 0.00 | |
| 14.80 26-Apr-49 | 8.50 | 7.55 | 0.00 | |
| 12.98 27-Mar-50 | 8.50 | 7.55 | 0.00 | |
Treasury Bills
Activity picked up in the treasury bills market as we saw short-dated bills (Jan-April) become popularly demanded. This may be attributed to the SWAP and OMO maturities for the banks that hit the system. Most of the short-dated bills were initially quoted at 0.40% but slide by approximately 20bps as their demand increased. We also saw interest in the CBN special bill sold to banks that was matched with adequate supply to fill the few market demand.
On the other hand, the mid and longer-dated bills saw no joy in today’s session as market participants shrug-off the urge to trade at that end of the curve.
We expect the markets to slow tomorrow as the market generally slides into Christmas/holiday mood.
| Benchmark OMO Bills | |||||
| Description | Bid (%) | Offer (%) | Day Change (%) | ||
| NGOMOB 0 01/05/21 | 5.00 | 0.15 | 0.00 | ||
| NGOMOB 0 02/02/21 | 5.00 | 0.20 | 0.00 | ||
| NGOMOB 0 03/02/21 | 5.00 | 0.20 | 0.00 | ||
| NGOMOB 0 05/11/21 | 6.00 | 0.30 | 0.00 | ||
| NGOMOB 0 06/08/21 | 6.50 | 0.30 | 0.00 | ||
| NGOMOB 0 08/10/21 | 6.50 | 0.35 | 0.00 | ||
| NGOMOB 0 09/07/21 | 6.50 | 0.50 | 0.00 | ||
| NGOMOB 0 10/19/21 | 7.00 | 0.50 | 0.00 | ||
|
Benchmark NTBills | |||||
| Description | Bid (%) | Offer (%) | Day Change (%) | ||
| NIGTB 0 12/31/20 | 5.00 | 0.15 | 0.00 | ||
| NIGTB 0 01/14/21 | 5.00 | 0.15 | 0.00 | ||
| NIGTB 0 02/11/21 | 5.00 | 0.20 | 0.00 | ||
| NIGTB 0 03/11/21 | 5.00 | 0.30 | 0.00 | ||
| NIGTB 0 04/29/21 | 6.00 | 0.30 | 0.00 | ||
| NIGTB 0 05/13/21 | 6.00 | 0.30 | 0.00 | ||
| NIGTB 0 06/10/21 | 6.50 | 0.35 | 0.00 | ||
| NIGTB 0 07/01/21 | 6.50 | 0.35 | 0.00 | ||
| NIGTB 0 08/26/21 | 6.50 | 0.35 | 0.00 | ||
| NIGTB 0 09/09/21 | 7.00 | 0.50 | 0.00 | ||
| NIGTB 0 10/14/21 | 7.00 | 0.65 | 0.00 | ||
Money Markets
System Liquidity jumped by approximately 165.92%, supported by SWAP/OMO maturities credited into the system. The market opened the day at c.N751.80 causing OVN rates to drop further by c.13bps as OBB and OVN rates closed the day at 0.50% and 0.75%, respectively.
We expect the market to remain stable at these levels tomorrow as there no immediate funding needs that would reverse the low levels of rate.
| Money Market Rates | ||
| Current (%) | Previous (%) | |
| Open Buy Back (OBB) | 0.50 | 0.50 |
| Overnight (O/N) | 0.75 | 0.88 |
FX Market
IEFX window dropped by N2 despite the apex bank slowing down in FX’s supply in that window. Quite a significant volume passed through the space today (c.S117m) with bid rates ranging between N386/$1-N396/$1.
However, all the other market segments remained relatively stable for a 3rd consecutive.
| FX Market | ||
| Current (N/$) | Previous (N/$) | |
| CBN Spot | 379.00 | 379.00 |
| CBN SMIS | 380.69 | 380.69 |
| I&E FX Window | 392.00 | 394.67 |
| Cash Market | 475.00 | 475.00 |
| Transfer Market | 490.00 | 490.00 |
Eurobonds
The NIGERIA Sovereign tickers had a bullish session today, supported by the slight recovery in crude oil prices, which initially dropped below $50. We also saw a little demand from local participants, consequently causing yields to fall by an average of c.4bps across the sovereign yield curve.
The NIGERIA Corporate tickers were also bullish, most especially the SEPLLN 22s, which strengthened by 17bps.
