Bonds & Fixed Income | |
Bonds & Fixed Income | |
3679 VIEWS | |
![]() |
Thursday, February 07, 2019 06:10AM / Zedcrest Capital
KEY
INDICATORS
Indicator |
Value |
Commentary |
Inflation |
11.44% |
As at January 16, 2019. A c.16bps increase from 11.28% recorded
in November 2018 |
MPR |
14.00% |
Left Unchanged for the 15th Consecutive Time at the
Jan. 22, 2019 MPC Meeting |
External Reserves |
$43.02bn |
As at February 5, 2019. A c.0.05% decrease from $43.04bn on February
4, 2019 |
Brent Crude |
$62.61pb |
As at February 6, 2019. A c.0.72% decrease from $62.16pb on February 5, 2019 |
Bonds
The Bond market had a quiet trading session, with very little
flows seen on select maturities. Yields expanded marginally by c.2bps on the
day, as the market marks time ahead of the coming national elections and bond
auction later in the month.
As demand remains weak for bonds at sub-15% yields, we maintain
our expectation for a flat market in the coming weeks.
Benchmark
FGN Bonds |
|||
Description |
Bid (%) |
Offer (%) |
Day Change
(%) |
15.54 13-Feb-20 |
15.15 |
14.45 |
0.06 |
14.50 15-Jul-21 |
15.07 |
14.89 |
(0.02) |
16.39 27-Jan-22 |
14.90 |
14.46 |
0.02 |
14.20 14-Mar-24 |
14.76 |
14.47 |
0.03 |
12.50 22-Jan-26 |
14.95 |
14.76 |
0.09 |
16.29 17-Mar-27 |
15.03 |
14.90 |
(0.01) |
13.98 23-Feb-28 |
15.12 |
15.03 |
(0.02) |
12.15 18-Jul-34 |
14.99 |
14.86 |
(0.01) |
12.40 18-Mar-36 |
15.02 |
14.85 |
0.01 |
16.2499 18-Apr-37 |
14.98 |
14.83 |
0.03 |
Source: Zedcrest Dealing
Desk
Treasury
Bills
The
T-bills market continued to trade on a quiet note, with relatively lower
volumes traded as the CBN continued its daily mop-up strategy by floating
another OMO auction. Yields across the NTB curve compressed by c.16bps on the
average. At the OMO auction, the CBN sold a total of c.N66.02bn while
maintaining stop rates across all tenors.
We expect
yields to remain relatively flat as the CBN is expected to float a more aggressive
OMO auction to mop up maturities of c.N315bn.
Treasury
Bills |
|||
Description |
Bid (%) |
Offer (%) |
Day Change
(%) |
14-Feb-19 |
13.00 |
12.15 |
0.00 |
14-Mar-19 |
11.75 |
11.35 |
0.00 |
4-Apr-19 |
11.00 |
10.00 |
(1.75) |
2-May-19 |
11.00 |
10.75 |
(0.50) |
13-Jun-19 |
11.70 |
11.00 |
0.20 |
18-Jul-19 |
13.00 |
12.50 |
0.00 |
1-Aug-19 |
13.25 |
13.00 |
(0.05) |
12-Sep-19 |
14.70 |
14.35 |
0.20 |
3-Oct-19 |
14.85 |
14.35 |
0.00 |
14-Nov-19 |
14.90 |
14.65 |
0.00 |
5-Dec-19 |
14.95 |
14.80 |
0.00 |
Source:
Zedcrest Dealing Desk
Money
Market
Rates in the
money market trended higher by c.1pct as the CBN continued its daily mop-up
strategy with a c.N6602bn OMO sale. The OBB and OVN rates consequently ended
the session at 20.67% and 21.83% respectively.
We expect rates to
crash opening tomorrow as OMO maturities ease up system liquidity levels.
Money Market Rates |
||
|
Current (%) |
Previous (%) |
Open Buy Back (OBB) |
20.67 |
19.50 |
Overnight (O/N) |
21.83 |
20.92 |
Source: FMDQ, Zedcrest Research
FX Market
At the Interbank, the Naira/USD rate
remained unchanged at N306.75/$ (spot) and N357.10/$ (SMIS). The NAFEX rate however saw a slight
depreciation by c.0.15% to close at N362.72/$. At the parallel market, the cash and transfer rates
depreciated by c.45k to close at N385.80/$ and N365.00/$ respectively.
FX Market |
||
|
Current (N/$) |
Previous ( N/$) |
CBN Spot |
306.70 |
306.70 |
CBN SMIS |
357.10 |
357.10 |
I&E FX Window |
362.72 |
362.19 |
Cash Market |
358.20 |
357.80 |
Transfer Market |
365.00 |
364.50 |
Source: CBN, FMDQ, REXEL
BDC
Eurobonds
The recent
bullish run on the NGERIA Sovereigns
slowed during today’s trading session, with yields compressing by a single
basis point. Demand witnessed at the mid-end of the curve, while sell interests
stayed at the long-end.
Interests for
select NGERIA Corps tickers continue
to gradually pick up, as demand was witnessed for the UBANL 2022s which
compressed by c.13bps on the day.
Related News
1. Market Players
Oversubscribe CBN OMO Amid Increased Demand on Short Tenor Bills
2. NSP-SPV Plc Up to N10Billion 15-Year Series 1 Guaranteed
Fixed Rate Senior Green Infrastructure Bond
3. Buoyant Liquidity Level Spurs Buying Interest as Average
Yield Compresses to 13.2%WoW
4. Bond Market Closed On A Bullish Note With Increased Demand
Seen On Most Maturities
5. February 2019 FGN Savings Bonds Offer For Subscription
6. Bond Yields Break Key Support amid Renewed Offshore
Interests
7. Massive Rally on Eurobonds as US FED Strikes Dovish Tone
8. Summary of January 2019 FGN Bond Auction Results
9. Bond Auction
Rates Clear Lower With Increased Demand on the 10-yr
10. Nigerian Eurobonds Turn Bearish Ahead of US FOMC Decision
11. Sustained High Demand On Short-Term Bills Pressure Average
Rates To 13.4% W-o-W