T.Bills Yields Drop Further As Market Liquidity Persists

Wednesday, October 09,
2019 / 08:00 AM / By Zedcrest Capital 
/ Header Image Credit: Pixabay

 

Activity in the
T-bills market remained bullish, as yields further nose-dived by c.25bps across
all tenors. Short end maturities went as low as 10.75%, while on the long-end,
yield were as low as 12.8% at close of trading. There’s a sentiment among
market players that CBN wants rates to be at these low positons, so as to
reduce cost of fund on interest repayments. Market still remains very liquid,
which also has a direct effect on the bullish trend noticed in the last couple
of days.
 

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

 

Bonds

The Bond market
was active today, as we noticed improved bids across all maturities but noticed
very little trades done. We also noted significant activity on the 2030s and
2040s.
 

We still expect
the same to persist tomorrow as investors remain cautious.

 
















Benchmark FGN Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

14.50 15-Jul-21

14.33

13.54

0.00

16.39 27-Jan-22

14.17

13.74

0.00

12.75 27-Apr-23

14.38

14.30

0.01

14.20 14-Mar-24

14.18

13.74

0.00

13.53 23-Mar-25

14.20

14.06

(0.04)

12.50 22-Jan-26

14.26

14.11

0.03

16.29 17-Mar-27

14.28

14.09

0.01

13.98 23-Feb-28

14.34

14.25

(0.02)

12.15 18-Jul-34

14.51

14.35

0.00

12.40 18-Mar-36

14.51

14.35

0.01

16.2499 18-Apr-37

14.60

14.32

0.00

14.80 26-Apr-49

14.66

14.61

0.00

Source: Zedcrest Dealing Desk

 

Treasury Bills

Activity in the
T-bills market remained bullish, as yields further nose-dived by c.25bps across
all tenors.

We still expect
market to be bullish and yields trend lower at the advent of CBN not issuing
OMO

 
















Benchmark Treasury Bills

Description

Bid (%)

Offer (%)

Day Change (%)

14-Nov-19

12.25

11.25

(0.35)

5-Dec-19

12.25

11.25

(0.55)

2-Jan-20

12.60

11.65

0.50

6-Feb-20

12.60

11.80

(0.20)

19-Mar-20

12.20

11.50

(0.60)

2-Apr-20

12.25

11.50

(0.55)

14-May-20

12.20

12.10

(0.90)

04-Jun-20

13.00

11.00

0.00

02-Jul-20

12.75

12.26

(0.20)

13-Aug-20

12.75

12.26

(0.35)

3-Sep-20

13.20

12.50

0.00

1-Oct-20

13.20

12.50

0.00

Source:
Zedcrest Dealing Desk

 

Money
Market

Money
market rates slightly dipped from yesterday by an average of c.50bps from last
week. Market rates remain very low as the system is still awash with liquidity.
OBB and OVN rates closed today at 3.07% and 3.79% respectively.
 

We
expect money market rates to still remain at these levels barring any CBN
mop-up.

 






Money Market Rates

 

Current (%)

Previous (%)

Open
Buy Back (OBB)

3.07

4.00

Overnight (O/N)

3.79

4.79

Source: FMDQ, Zedcrest

 

FX Market

At
the interbank, the Naira/USD spot rate remained stable at N307.00/$ while the
SMIS rates remained stable at N358.13/$. At the I&E window, the closing
rate for the Naira further increased by 8k to close the day at N362.45/$.

The
cash and transfer rates at the parallel markets also saw no change, closing at
N357.80/$ and N362.50/$ respectively.









FX Market

 

Current (N/$)

Previous ( N/$)

CBN
Spot

307.00

307.00

CBN
SMIS

358.13

358.13

I&E
FX Window

362.45

362.37

Cash
Market

357.80

357.80

Transfer
Market

362.50

362.50

Source: CBN, FMDQ, REXEL BDC

 

Eurobonds

Trading activity
in the NGERIA Sovereigns and Corps papers was significant. We had
improved demand by investors for the second day
running on some corp papers.

We
still expect significant demand in some local corp papers

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

 

 

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Secretariat

4.      Secondary Market
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5.      Interswitch
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6.      P and ID Versus
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7.      Treasury Bills
Auction Scheduled For October 2nd, 2019

8.     The Bulls
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Boost

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10.  CBN Sells
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Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.
Proshare Nigeria Pvt. Ltd.