- As domestic bond market extends bullish run
The Central Bank of Nigeria (CBN) has directed all deposit money banks (DMBs) to ensure full compliance with the Swift Universal Confirmation requirement by making sure the confirmation gets to Swift within two days of transaction.
In a release at the weekend, the bank said such confirmation should get to Swift in two working days of a transaction, indicating whether the beneficiary’s account has been credited, payment rejected or pending.
“All SWIFT customers are required to provide confirmation on the outcome of all their incoming single customer payment (MT103) messages to SWIFT via tracker, also known as universal confirmation. Please note that all financial institutions in the ecosystem would be measured on whether they confirm 80 per cent of their weekly payment.” the statement said.
Furthermore, the CBN noted that Swift offers different ways to provide status updates through automated or manual methods. The channels include basic tracker-manual, API calls, automated MT199 confirmations, batch confirmations, full GPI and ISO 20022.
It advised banks to review and select appropriate channels that suit their operations with a view to meeting the deadline of November 22, 2020, set by Swift for compliance.
Meanwhile, the bullish sentiment in the bond market were sustained as average yield continued to dwindle, down 37 basis points (bps) to 6.3 per cent. The trading session kicked-off on Monday with average yield rising 3bps following sell-offs on short tenor bonds. However, the market closed in the green on the remaining trading days. Across tenors, the medium-term instruments recorded the most buying interest with the average yield down 63 bps week-on-week (w/w). Similarly, average yield on the long and short-term instruments declined 18 bps apiece w/w.
Across the SSA Eurobonds space, there was a bullish performance as average yield fell by 55 bps w/w to 9.5 per cent. The Nigeria 2021 and Senegal 2021 instruments recorded the most buy interest as the respective yields fell 182bps and 82bps w/w.
Trailing, the yield on the Nigerian 2032 and Senegal 2031 instruments declined 81 bps and 80 bps w/w respectively. Conversely, Ghana 2022 and Zambia 2022 recorded sell-offs with the yields rising 22 bps and 13 bps w/w respectively. Performance at the African Corporate Eurobonds market under our coverage was positive as average yield declined 33 bps w/w to 5.9 per cent. According to market traders, “yields are expected to fall in the domestic bond market, while we expect sustained interest in the Eurobonds segment this week”.
