Bond Yields Trend Higher as Market players Cut losses on the 10-Yr


July 26, 2018/Zedcrest Capital

***Nigeria’s 9mobile takeover nears as regulator finalizes review*** – Reuters


Indicator Value Commentary
Inflation 11.23% As at July 23, 2018, 38bps down from 11.61% recorded in May 2018.
MPR 14.00% Next MPC meeting scheduled for September 24 & 25, 2018
External Reserves $47.26bn As at July25, 2018. A c.0.08% decreasefrom $47.30bn as at July 24, 2018.
Brent Crude $75.07pb As at July 26, 2018. A c.1.04% increasefrom$74.30pb as atJuly25, 2018


The Bond market remained scantily traded in today’s session, with very few trades observed mostly on the 2020s and 2034s. Market players were however bearish on the 2028s following the significantly higher stop rate on the bond at the previous day’s auction. This consequently pushed yields higher by c.13bps avg., as spreads widened across other maturities.

We expect yields to remain slightly pressured, but with some intermittent client demand expected on the longer end of the curve.

FGN Bonds
Description Bid (%) Offer (%) Day Change (%)
15.54 13-Feb-20 13.96




14.50 15-Jul-21 13.77 13.28


16.39 27-Jan-22 13.62 13.20


14.20 14-Mar-24 13.87 13.64


12.50 22-Jan-26 14.12 14.06


16.29 17-Mar-27 14.10 13.96


13.98 23-Feb-28 14.37 14.26


12.15 18-Jul-34 14.26 14.19


12.40 18-Mar-36 14.32 14.16


16.2499 18-Apr-37 14.24 14.10 0.07

Source: Zedcrest Dealing Desk 

Treasury Bills

Activities in the T-bills market remained slightly bearish, as the CBN intervened in the market via an OMO auction sale to mop up excess inflows (c.N400bn) from maturing OMO bills. A total of c.N350bn of the 91- and 210-day bills offered were purchased by market players, with stop rates maintained at 11.05% and 12.15% respectively. Secondary Market Yields consequently inched higher by c.3bps, following slight sell mostly on the 30-Aug and 31-Jan maturities.

We expect yields to remain relatively stable, as system liquidity remains relatively buoyant at c.N280bn, following the net inflows from today’s OMO maturity.

Secondary Market Treasury Bills
Description Bid (%) Offer (%) Day Change (%)
2-Aug-18 11.20




13-Sep-18 11.20 11.00


4-Oct-18 10.25 9.40 (0.05)
1-Nov-18 10.85




6-Dec-18 12.10 11.85


3-Jan-19 11.95 11.65


14-Feb-19 12.10 12.00


14-Mar-19 12.10 11.00


4-Apr-19 12.00 11.00


18-Jul-19 11.45





Source: Zedcrest Dealing Desk 

Money Market

The OBB and OVN rates remained relatively stable at 7.33% and 7.92% respectively, as system liquidity is estimated to increase slightly by c.N50bn as at close of business today.

Rates are expected to close the week at these levels, as there are no significant outflows expected, with exception however of c.N67bn Bond auction debits, which should be largely offset by c.N50bn bond coupon payments on the Jan-2022 maturity.

Money Market Rates
  Current (%) Previous (%)
Open Buy Back (OBB) 7.33 7.07
Overnight (O/N) 7.92 8.21

Source: FMDQ, Zedcrest Research 

FX Market

The Naira remained stable at N305.90/$ in the Inter-bank market, whilst depreciating slightly by 0.11% to N361.86/$ at the I&E window. The Parallel market rates also stayed flat, closing at N358.50/$ and N361.50/$ at the Cash and transfer market segments respectively.

The CBN’s external reserves has however maintained its recent decline, down to $47.26bn as at 25th of July, as the CBN has sustained its interventions across the various market segments, in the wake of weaker inflows from Foreign portfolio investors.    

FX Market
  Current (N/$) Previous ( N/$)
CBN Spot 305.90 305.90
CBN SMIS 330.00 330.00
I&E FX Window 361.86 361.45
Cash Market 358.50 358.50
Transfer Market 361.50 361.50



The Nigerian Sovereigns remained firmly bullish, with yields compressing by c.20bps across the curve. We witnessed the most interest on the 2047s, which gained about 2pct d/d.

Investors remained slightly bullish on the Nigerian Corporates, with most interest seen on the DIAMBK 19s, ACCESS 21s and UBANL 22s.

Proshare Nigeria Pvt. Ltd.

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