RESEARCH PUBLICATIONS :: Bond Blast
WEEKLY FIXED INCOME AND BOND TRADING HAPPENINGS
WEEK ENDING AUGUST 15, 2008
As the week progressed there was a noticeable contraction in market liquidity as the market prepared to position itself for the GOJ offering of US$55million in index bond. This resulted in 30 day fund trading as high as 15% during intraday trading on Thursday however by the close of business Friday there was a significant improvement in liquidity conditions as the proceeds of over 4.75billion from the maturity the FR 10.5% 2008 IB penetrated the market.
The instrument when compared to the maturing bond is not as attractive. It pays a fixed rate of 7.25% which is 3.25% less than the previous Index Bond coupon, additionally the settlement conversion rate is set at $ 72.2592( the 10 day moving average ) while current market rates are trading between 71.90-72.00. Despite the terms not being the most attractive brokers have indicated moderate interest as it serves the purpose of providing much needed USD physicals.
Summary of Market Rates
Rates on the J$ overnight market traded between 7-10%, call funds for 1 to 2 weeks traded between 10-13% and the 30 day market traded between 14.40% - 15%. In the USD market Overnight funds traded between 4.50 – 5.50%, whilst the rate on 30-day market increased and traded between 5.50% - 6.00%.
UPCOMING MATURITIES FOR THE PERIOD AUGUST 18-22:
| INSTRUMENT TYPE | REDEMPTION DATE | NOMINAL VALUE | FGFS HOLDING |
| FR 12.875% 2008 Invest Debent Series Az | 24-Aug - 2008 | $2,563,266,031.00 | - |
Bond Market Summary
There continues to be little activity in the Bond market, as per several weeks running. The Bond market has been affected in recent times by low levels of USD liquidity in the fixed income/foreign exchange markets. Although there was some reprieve with the inflow of the Angostura payments last month end, portfolio managers continue to approach this market with cautious optimism. We continue to see decline in most if not all bonds on the curve, whilst this could present itself as an excellent buying opportunity, especially on the latest issue of the GOJ 2019, which many portfolio managers have taken positions in, it is best to set an entry and exit point in this market at this time.
*** See list of Upcoming Instruments to be issued for the month of August and a list of global Bond prices.