Bonds & Fixed Income | |
Bonds & Fixed Income | |
3517 VIEWS | |
![]() |
Saturday, April 04 2019 04:50 AM /Zedcrest Capital
***PMS
imports rise 21.7% in Q4’18*** - NBS
KEY
INDICATORS
Indicator |
Value |
Commentary |
Inflation |
11.31% |
As at March 15, 2019. A c.6bps decline
from 11.37% recorded in January 2019 |
MPR |
13.50% |
Cut by 50bps to 13.50% at the Mar.
26, 2019 MPC Meeting |
External Reserves |
$44.68bn |
As at April 3, 2019. A c.0.09% increase
from $44.65bn on April 2, 2019 |
Brent Crude |
$69.86pb |
As at April 5, 2019. A c.0.16% decrease from $69.97pb
on April 4, 2019 |
Bonds
The
FGN Bond market traded on quieter note in today’s session, with yields
moderating by c.9bps owing to some bargain purchases mostly on the 2025 and
2026 maturities which traded at a low of 14.26%. The mid to long end of the
curve however remained slightly pressured, with yields marginally lower by
c.5bps, in absence of any significant demand interests on the maturities.
The
DMO released its Q2 2019
FGN Bond calendar today, confirming market expectations for a
new 30-year bond offer, whilst also signalling Government’s intention to raise
between N85bn – N115bn monthly in Q2 2019.
We expect some more buying interests to compress yields marginally especially on the shorter end of the curve.
Benchmark FGN Bonds |
|||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
14.50 15-Jul-21 |
14.79 |
14.20 |
(0.08) |
16.39 27-Jan-22 |
14.50 |
14.05 |
(0.05) |
12.75 27-Apr-23 |
14.75 |
14.52 |
(0.01) |
14.20 14-Mar-24 |
14.51 |
14.42 |
0.00 |
13.53 23-Mar-25 |
14.55 |
14.25 |
(0.27) |
12.50 22-Jan-26 |
14.50 |
14.26 |
(0.29) |
16.29 17-Mar-27 |
14.69 |
14.39 |
(0.01) |
13.98 23-Feb-28 |
14.69 |
14.62 |
(0.08) |
12.15 18-Jul-34 |
14.57 |
14.42 |
(0.05) |
12.40 18-Mar-36 |
14.53 |
14.46 |
(0.06) |
16.2499 18-Apr-37 |
14.45 |
14.30 |
(0.05) |
Source: Zedcrest Dealing Desk
Treasury Bills
The T-bills market
We expect yields to remain slightly pressured as system
liquidity is expected to remain constrained by an wholesale FX auction opening
the new week.
Benchmark Treasury Bills |
|||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
2-May-19 |
9.90 |
9.65 |
0.00 |
13-Jun-19 |
13.00 |
11.75 |
0.75 |
18-Jul-19 |
12.00 |
9.00 |
0.00 |
1-Aug-19 |
12.25 |
12.00 |
0.00 |
12-Sep-19 |
13.15 |
12.90 |
0.00 |
3-Oct-19 |
13.15 |
12.95 |
0.05 |
14-Nov-19 |
13.25 |
13.00 |
0.10 |
5-Dec-19 |
13.20 |
12.95 |
0.00 |
2-Jan-20 |
13.20 |
13.00 |
(0.05) |
6-Feb-20 |
13.15 |
12.90 |
0.05 |
Source: Zedcrest Dealing Desk
Money Market
Rates
in the money market moderated slightly by c.3pct in the absence of any
significant funding pressures today. The OBB and OVN rates consequently ended
the session at 15.29% and 16.14% respectively.
We
expect rates to trend higher opening the new week, due to expected outflows for
the weekly wholesale FX auction by the CBN.
Money
Market Rates |
||
|
Current
(%) |
Previous
(%) |
Open
Buy Back (OBB) |
15.29 |
19.71 |
Overnight
(O/N) |
16.14 |
20.86 |
Source: FMDQ, Zedcrest Research
FX Market
At the Interbank, the Naira/USD rate was
unchanged at N307.00/$ (spot) and N355.78/$ (SMIS). The NAFEX closing rate in
the I&E window was relatively unchanged at N360.33/$, whilst market
turnover rose higher by 105% to $244m. At the parallel market, the cash rate
appreciated by 0.08% to N358.30/$ whilst the transfer rate remained unchanged at
N364.00/$.
FX
Market |
||
|
Current
(N/$) |
Previous
( N/$) |
CBN
Spot |
307.00 |
307.00 |
CBN
SMIS |
355.78 |
355.78 |
I&E
FX Window |
360.33 |
360.30 |
Cash
Market |
358.30 |
358.60 |
Transfer
Market |
364.00 |
364.00 |
Source: CBN, FMDQ, REXEL BDC
Eurobonds
We witnessed slight interests in
the NGERIA sovereigns, with yields
marginally lower by c.1bp on the back of some renewed buying interests mostly
on the 2038s.
In the NGERIA Corps, we witnessed slight demand for the FBNNL 21s, UBANL 22s and FIDBAN 22s.
Related News
1.
DMO Releases
Public Debt Data for December 2018
2.
Bond Market Turns Bearish as Selloffs Persist
3.
SFS Eurobonds Quote - 020419
4.
Bond Yields Trend Higher Following Sell off on the 10-Year
5.
Funding Rates Spike as CBN Resumes OMO with c.N325bn Sale
6.
Money Market Rates Compress Further As CBN Stays Mute on
OMO
7.
Access Bank Lists Pioneer N15bn Nigerian Green Bond At
FMDQ OTC
8.
Average Money Market Rate Fell By 4.28% To Settle At
10.27%
9.
United Capital Shares Insights as Lead Issuing House of
NSP Green Bond
10. April 2019 FGN Savings Bonds Offer For Subscription
11.
Funding Rates Close Stable as FAAC Inflows Bolster System
Liquidity
12. Bond Market Trades Flat, Despite Significant Cut in
Auction Rates