Bond, Clean Prices and Dirty Prices | Bond market

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 June 26th, 2019.

***Oil Prices Soar After Huge Plunge in U.S. Crude Inventories***

Key Indicators

Bonds: The FGN Bond market traded on a relatively quiet note, with only slight demand interests observed during the session, as market players placed bids for the Auction by the DMO. The Bond auction was moderately oversubscribed at 1.65X bid to cover with a total sale of N96.84bn. Stop rates however cleared c.21bps higher from previous auction levels at 14.30%, 14.50% and 14.68% on the 23s, 29s, and 49s respectively.

We expect yields to be relatively stable in the near term, as the recent uptrend in oil prices and dovish central bank tilts provide some positive support for the local bonds.

Treasury Bills: The T-bills market remained mildly bullish with some more buying interest witnessed on the short and mid-end of the curve. Yields were consequently lower by c.7bps on the day.
We expect demand interests to persist, due to the relatively buoyant system liquidity level and the continued absence of an OMO auction by the CBN.

Money Market: Rates in the money market moderated further by c.1pct as there were no significant outflows from the system. The OBB and OVN rates consequently ended the session at 5.50% and 6.07%, with system liquidity estimated to be relatively unchanged at N290bn.
We expect rates to moderate further tomorrow, due to the c.N31bn expected OMO maturities. This is, however, barring a renewed OMO sale by the CBN.

[READ ALSO: Naira under pressure as forex demand increases(Opens in a new browser tab)]

FX Market: At the interbank, the Naira/USD rate remained stable at N306.90/$ (spot) and N357.53/$ (SMIS), whilst the NAFEX rate at the I&E window was relatively unchanged at N360.75/$. At the parallel market, the cash and transfer rates closed unchanged at N359.20/$ and N362.50/$ respectively.

Eurobonds: The NIGERIA Sovereigns were relatively unchanged on the day, but with slight gains observed on the longer end of the curve, following some positive comments from the US Treasury Secretary on the US-China Trade negotiations.
Demand Interests in the NIGERIA Corps remained firm, with most papers still on full bid all through the session. There was however slight sell interest witnessed on the UBANL 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 advice 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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