Bonds & Fixed Income | |
Bonds & Fixed Income | |
4666 VIEWS | |
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Thursday, February 07, 2019 07:40 PM / Zedcrest Capital
*** Oil Slips As Investors Weigh Up
Supply Factors***
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 |
$42.99bn |
As at February 6, 2019. A c.0.07% decrease
from $43.02bn on February 5, 2019 |
Brent Crude |
$62.33pb |
As at February 7, 2019. A c.0.45% decrease from $62.61pb
on February 6, 2019 |
Bonds
The
Bond market traded on a significantly bullish note with yields compressing by
further by c.9bps, following increased demand on the mid to long end of the
curve from both local and offshore investors.
Market
sentiment has turned bullish since the January FGN Bond auction, with yields
having compressed by c.30bps to date. Whilst we expect the buying interests to
persist, we anticipate a slight reversal in yields towards month end.
Benchmark FGN Bonds |
|||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
15.54 13-Feb-20 |
15.04 |
14.43 |
(0.11) |
14.50 15-Jul-21 |
15.04 |
14.86 |
(0.03) |
16.39 27-Jan-22 |
14.88 |
14.33 |
(0.02) |
14.20 14-Mar-24 |
14.71 |
14.29 |
(0.05) |
12.50 22-Jan-26 |
14.85 |
14.70 |
(0.10) |
16.29 17-Mar-27 |
14.93 |
14.77 |
(0.10) |
13.98 23-Feb-28 |
15.01 |
14.89 |
(0.11) |
12.15 18-Jul-34 |
14.92 |
14.71 |
(0.07) |
12.40 18-Mar-36 |
14.85 |
14.73 |
(0.17) |
16.2499 18-Apr-37 |
14.82 |
14.68 |
(0.16) |
Source: Zedcrest Dealing Desk
Treasury Bills
The T-bills
market remained slightly bearish as the CBN floated another OMO auction which
was significantly oversubscribed by market players especially on the 364-day
bill offered. The CBN consequently sold a total of c.N321bn of the N250bn
offered as it looked to mop up the c.N315bn in maturing OMO bills.
We expect yields
to close the week on a relatively flat note, with the CBN expected to sustain
its OMO interventions in the market tomorrow.
Treasury Bills |
|||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
14-Feb-19 |
13.50 |
12.35 |
0.50 |
14-Mar-19 |
13.50 |
11.25 |
1.75 |
4-Apr-19 |
12.00 |
10.00 |
1.00 |
2-May-19 |
11.15 |
11.00 |
0.15 |
13-Jun-19 |
12.95 |
10.00 |
1.25 |
18-Jul-19 |
13.75 |
12.40 |
0.75 |
1-Aug-19 |
13.30 |
13.20 |
0.05 |
12-Sep-19 |
14.75 |
14.40 |
0.05 |
3-Oct-19 |
14.90 |
14.50 |
0.05 |
14-Nov-19 |
14.95 |
14.85 |
0.05 |
5-Dec-19 |
15.00 |
14.75 |
0.05 |
2-Jan-20 |
15.00 |
14.75 |
0.00 |
Source: Zedcrest Dealing Desk
Money Market
Rates
in the money market remained elevated as inflows from OMO maturities were
completely mopped up by a further OMO sale by the CBN. The OBB and OVN rates
consequently ended the session marginally lower at 17.33% and 18.42%
respectively.
We
expect rates to remain elevated closing the week, as there are no significant
inflows anticipated.
Money
Market Rates |
||
|
Current
(%) |
Previous
(%) |
Open
Buy Back (OBB) |
17.33 |
20.67 |
Overnight
(O/N) |
18.42 |
21.83 |
Source: FMDQ, Zedcrest Research
FX Market
At the Interbank, the Naira/USD rate remained
unchanged at N306.70/$ (spot) and N357.10/$ (SMIS). The NAFEX rate in the
I&E window appreciated further by c.0.02% to a six month high of N361.64/$
amid renewed inflows from offshore investors and exporters since the start of
the new month. At the parallel market, the cash rate depreciated by c.0.28% to
N359.20/$, while the transfer rate remained unchanged at N365.00/$.
FX
Market |
||
|
Current
(N/$) |
Previous
( N/$) |
CBN
Spot |
306.70 |
306.70 |
CBN
SMIS |
357.10 |
357.10 |
I&E
FX Window |
361.64 |
361.72 |
Cash
Market |
359.20 |
358.20 |
Transfer
Market |
365.00 |
365.00 |
Source: CBN, FMDQ, REXEL BDC
Eurobonds
The NGERIA Sovereigns pulled back gains in today’s session, with yields
trending higher by c.9bps on average, as some investors lightened their
holdings in view of the strengthening of the US dollar.
In the NGERIA Corps, yields were relatively flat across board, except for
slight selloff on the DIAMBK 19s.
Related News
1.
A Quiet Trading
Session as Daily OMO Auction Takes Centre Stage
2.
Market Players Oversubscribe CBN OMO Amid Increased Demand
on Short Tenor Bills
3.
NSP-SPV Plc Up to N10Billion 15-Year Series 1 Guaranteed
Fixed Rate Senior Green Infrastructure Bond
4.
Buoyant Liquidity Level Spurs Buying Interest as Average
Yield Compresses to 13.2%WoW
5.
Bond Market Closed On A Bullish Note With Increased Demand
Seen On Most Maturities
6.
February 2019 FGN Savings Bonds Offer For Subscription
7.
Bond Yields Break Key Support amid Renewed Offshore
Interests
8.
Massive Rally on Eurobonds as US FED Strikes Dovish Tone
9.
Summary of January 2019 FGN Bond Auction Results
10. Bond Auction
Rates Clear Lower With Increased Demand on the 10-yr
11. Nigerian Eurobonds Turn Bearish Ahead of US FOMC Decision