A Quiet Trading Session as Global Oil Pressure Weigh on Nigerian Sovereign Eurobonds


By Zedcrest Capital


***President Trump ousts national security adviser, opens the door for a deal with Iran***




The Bond market had a quiet trading session, with very little flows seen on select maturities. Yields compressed marginally by c.1bps on the average across the benchmark Bond curve. We noted some selling pressure at the mid-end of the curve, most especially the FGN 2026s and 2027s maturities.


As demand remains weak for bonds at current levels, we maintain our expectations for cautious trading sentiments in the coming trading sessions.


Treasury Bills

The 2-day bullish run witnessed in the Treasury bills market came to a halt reduced system liquidity hampered position-taking by market participants. We noted some demand for maturities dated Jan. to Feb. 2020 as well as the long end (Aug. 2020 maturities).


We expect a cautious trading session tomorrow, as market participants focus on the PMA Yields with expectations for higher stop-rates.



Money Market

Interbank funding rates increased off the back of liquidity mop-up by the CBN via an OMO auction and Wholesale FX funding the previous day. The OBB and OVN rates consequently ended the session at 12.14% and 12.93% respectively, with system liquidity estimated to have closed at c.N151bn positive


We expect rates to remain pressured in tomorrow’s session, with some respite expected at the close of the week off coming OMOM maturities.


FX Market

At the interbank, the Naira/USD spot rate appreciated by 5k to close at N306.85/$ while the SMIS rate remained stable at N358.02/$. At the I&E window, continued supply caused the Naira to appreciate by 38k to close at N361.80/$. At the parallel market, the cash lost 20k to close at N357.70/$ while the transfer rate remained stable at N362.50/$.


Concerns of global oil supply cuts as a shuffle in President Trump’s signalled a possible way to a deal with Iran, thus pressuring the NGERIA Sovereigns to give up previous gains in today’s session. Yields expanded by c.11bps on the average across the curve. We expect continued volatility in the Nigerian sovereign papers in tandem with the performance of global oil prices.


Activity in the NGERIA Corps was also muted, however, we saw some better sellers on the ETINL 2024s while the FIDBAN 2022s saw some demand interest.



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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