Funding rates crash by c.14pct as inflows from OMO and PMA Repayments bolster System Liquidity

KEY INDICATORS

Bonds

                                
Source: Zedcrest Dealing Desk 

Treasury Bills

The T-bills market traded on a slightly bullish note, with demand especially on the April and Nov maturities. This came as the CBN did not conduct an OMO auction, despite the significant inflows of c.N208bn from OMO and Net PMA repayments. We expect yields to close the week on a relatively calm note, as market players largely expect a resumption in OMO auctions in the coming week. 

Source: Zedcrest Dealing Desk

Money Market

The OBB and OVN rates crashed to 6.83% and 8.08% respectively, on the backdrop of inflows from OMO and PMA repayments which bolstered system liquidity to c.N325bn positive. We expect rates to close the week on a relatively calm note, due to the relatively boisterous system liquidity. This is however barring a significant OMO sale by the CBN.

Source: FMDQ, Zedcrest Researc h

FX Market

The Interbank rate remained stable at its previous rate of N305.70/$, with the CBN’s external reserves recorded to have improved by 1.54% to $45.36bn as of 21 March. The NAFEX rate appreciated by 0.05% to N360.12/$, with total volume traded dropping by 55% to $156m. Rates in the Unofficial market also appreciated strongly by 0.17% to N361.10/$, due to renewed supply of the greenback in that segment of the market.

Source: CBN, FMDQ, REXEL BDC

Eurobonds

Yields in the NGERIA Sovereign space declined by c.6bps, in a gradual recovery from the sell offs witnessed in the previous sessions prior to the FOMC’s interest rate decision. We witnessed most trades on the 2038 and 2047 bonds as market players hunted for the relatively higher yields on the long end of the curve (27s - 47s).  We expect this trend to persist, with yields still expected to decline slightly to their pre-selloff levels.

The Nigerian Banks were also slightly bullish on most tickers, except for continued bearish pressures witnessed on the 2022s (Zenith, UBANNL and FIDBAN). Investors were also slightly bearish on the Access 21s sub, while there were almost only bids for the ECOTRA 21s. The SEPLLN 23 is still trading close to par.  

Contact us:

Dealing Desk: 01-6311667   Dayo: 07032208237         Seyi: 08023231396            Nnamdi:+2348133385000   Email: research@zedcrestcapital.com

Disclaimer:
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 research 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