Treasury Market T-bills

Welcome to Nairametrics‘ summary of the daily performance of major economic indicators and highlights from trading sessions and key statistics such as Treasury Bills and Bonds. This is brought to you by Zedcrest.

This report is dated May 28th, 2019.

Ecobank’s 2024 Eurobond Tap Issuance records 470% oversubscription; clears at 8.25%

***CBN to Rollover c.N67bn NTB Maturities on Thursday***

Key Indicators

Bonds: The FGN Bond market traded on a slightly bearish note, due to slight sell mostly on the mid to long end of the curve. Yields were consequently higher by c.6bps on the day.

With the DMO set to issue a second N15bn tranche of its green bond offering, we expect yields to remain slightly pressured in the near term. We, however, expect some renewed interests as yields approach the 14.50% mark on some tenors.

 

Treasury Bills: The T-bills market traded with mixed sentiments in today’s session, with renewed demand interests witnessed on some short and mid tenors, while selloffs persisted on the longer end of the curve ahead of the NTB auction to be held on Thursday. Yields were consequently higher by c.5bps on the day.

The CBN will offer c.N67bn T-bills to rollover existing NTB maturities upon resumption from the erstwhile Democracy daybreak. Whilst we expect rates to trend lower from previous levels on the 182 and 364-day offerings, we expect them to tick higher on the 91-day bill due to the uptrend in the clearing rate at the last OMO auction held.

Money Market: Rates in the money market declined slightly by c.3pct, as system liquidity improved to c.N150bn positive. The OBB and OVN rates consequently ended the session at 12.00% and 13.43% respectively.

We expect rates to decline further in the next session, due to c.N134bn expected OMO maturity inflows. This is, however, barring a renewed OMO sale by the CBN.

FX Market: At the Interbank, the Naira/USD rate remained unchanged at N306.95/$ (spot) and N356.92/$ (SMIS). The NAFEX closing rate in the I&E window however increased marginally by 0.01% to N360.63/$, as the market turnover declined further by 35% to $88m. At the parallel market, the cash and transfer rate remained unchanged at N359.00/$ and N363.50/$ respectively.

Eurobonds: The NIGERIA Sovereigns remained bearish, with yields rising higher by c.3bps on the day.

In NIGERIA Corps, we witnessed improved supply on the ETINL 24s following the $50m tap issuance during the session which recorded a 470% oversubscription and cleared at 8.25%. The FIDBAN 22s however remained impossible to source, whilst there were no significant interests in the other tickers, except for slight demand seen on the ZENITH 22s.


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Dealing Desk: 01-6311667 Email: research@zedcrestcapital.com

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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