Bond Market turns Bearish as Offshore Investors Take Profit

Culled—Proshare

7/11/2017/@ZedcrestCapital 

KEY INDICATORS

Proshare Nigeria Pvt. Ltd.

The Bonds Market

The bond market turned bearish today, due to some sell by offshore clients on the long end of the curve (2027 – 2037 maturities). Average bond yields consequently rose by 6bps to 15.01% from 14.95% in the previous session. We expect yields to decline slightly tomorrow, with some local demand expected at these levels. 

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Treasury Bills

The T-bills market was relatively quiet today, but with some buys on the short end of the curve as market players continued to cherry pick some of the high yielding bills (above 18%) in the market. The CBN continued with its OMO auction in today’s session, selling a total of N98.79million 100-day and N48.09billion 198-day OMO bills, with rates maintained at 16% and 17.80% respectively. Average T-bills yields consequently declined by 32bps to 18.69%. We expect the market to be relatively quiet tomorrow, with market players expected to be more active at the CBN’s OMO auction. 

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

The Money Market

The OBB and OVN rates fell by about 10bps to close today at 24.67% and 26.25% from 35% closing levels in the previous session. This was due to a slowdown in funding pressures which was exacerbated by the outflows for Retail and wholesale SMIS in previous sessions. System liquidity is estimated to decline to N132billion negative due to debits for today’s OMO Sale. An expected deduction for Monday’s SMIS is also expected to worsen the net liquidity figure. Funding rates are however expected to ease slightly tomorrow, as market players anticipate inflows from OMO maturities on Thursday.

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The FX Market

The CBN Official spot rate remained stable its previous day rate of N305.90/$, even as its external reserves is recorded to have improved by 2.05% to $34.01billion as at 6th of November. Rates at the Investors and exporters FX window closed at N360.46/$ from N360.05/$ in the previous session, while the parallel market rate remained unchanged at N361.20/$

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For more details email research@zedcrestcapital.com or call the dealing desk via 01-6311667  

Disclaimer:

Whilst proper and reasonable care has been taken in the preparation and accuracy of the facts and figures presented in this report, no responsibility or liability is accepted by Zedcrest Capital or its employees for any error, omission or opinion expressed herein. This report is not an investment research or a research recommendation and should not be regarded as such. The information provided herein is by no means intended to provide a sufficient basis on which to make an investment decision. 

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