| Bonds & Fixed Income |    4636 VIEWS  |
| Bonds & Fixed Income | |
| 4636 VIEWS | |
 |
Tuesday, March 19, 2019 07:10 PM / Zedcrest Capital
***Nigeria
Seeks Concessional Loans Over Bonds as Debt Costs Rise *** - Bloomberg
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 |
14.00% |
Left Unchanged for the 15th Consecutive Time at the
Jan. 22, 2019 MPC Meeting |
|
External Reserves |
$43.32bn |
As at March 18, 2019. A c.0.63% increase from $43.05bn on March 15,
2019 |
|
Brent Crude |
$67.54pb |
As at March 19, 2019. A c.0.10% increase from $67.45pb on March 18, 2019 |
Bonds
The FGN Bond market traded on a relatively quiet note except for
slight sell witnessed on the 2028 bond towards the close of the trading
session. Yields however compressed by c.3bps on average, following slight
decline in yields on the short end of the curve.
We expect demand interests to be relatively muted, with yields
expected to remain stable in the near term.
|
Benchmark
FGN Bonds |
|||
|
Description |
Bid (%) |
Offer (%) |
Day Change
(%) |
|
14.50 15-Jul-21 |
14.65 |
14.30 |
(0.06) |
|
16.39 27-Jan-22 |
14.50 |
14.35 |
(0.08) |
|
12.75 27-Apr-23 |
14.55 |
14.45 |
0.00 |
|
14.20 14-Mar-24 |
14.37 |
14.05 |
(0.03) |
|
13.53 23-Mar-25 |
14.46 |
14.37 |
(0.08) |
|
12.50 22-Jan-26 |
14.40 |
14.31 |
0.00 |
|
16.29 17-Mar-27 |
14.40 |
14.30 |
0.04 |
|
13.98 23-Feb-28 |
14.38 |
14.33 |
0.03 |
|
12.15 18-Jul-34 |
14.27 |
14.25 |
(0.10) |
|
12.40 18-Mar-36 |
14.25 |
14.14 |
(0.05) |
|
16.2499 18-Apr-37 |
14.21 |
14.12 |
(0.01) |
Source: Zedcrest Dealing Desk
Treasury
Bills
The T-bills market traded on a relatively quiet note,
with yields trending slightly higher following an OMO auction announcement by
the CBN. The OMO auction was howewer oversubcribed by c.105%, leading to a
further cut in stop rates by 4bps to 11.80% on the 93-day and by 6bps to 13.14%
on the 205-day, with total sale of N15.90bn and N100.41bn respectively.
The CBN would conduct an NTB auction tomorrow, with
only c.N49bn T-bills on offer. Given the signifcantly smaller amount of T-bills
on offer, we expect stop rates to clear at about 15 - 30bps lower than their
levels in the previous week’s auction.
|
OMO Auction Result |
||||
|
Tenor |
Rate (%) |
Offer (N’bn) |
Sub (N'bn) |
Sale (N'bn) |
|
93 day |
11.80 |
30.00 |
26.04 |
15.90 |
|
205 day |
13.14 |
70.00 |
179.26 |
100.41 |
Source: CBN
|
NTB Auction Expectation |
|||
|
Tenor |
Offer (N'bn) |
Expected Rate (%) |
Previous Rate (%) |
|
91 days |
3.00 |
10.55 - 10.85 |
10.75 |
|
182 days |
8.39 |
12.30 - 12.70 |
12.50 |
|
364 days |
37.18 |
12.25 - 12.55 |
12.85 |
|
Benchmark Treasury Bills |
|||
|
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
|
4-Apr-19 |
13.00 |
10.00 |
0.00 |
|
2-May-19 |
11.50 |
10.00 |
(0.05) |
|
13-Jun-19 |
11.75 |
11.65 |
0.05 |
|
18-Jul-19 |
12.50 |
12.00 |
0.00 |
|
1-Aug-19 |
13.00 |
11.85 |
0.90 |
|
12-Sep-19 |
13.20 |
13.00 |
0.05 |
|
3-Oct-19 |
13.20 |
13.15 |
0.00 |
|
14-Nov-19 |
13.20 |
13.05 |
0.00 |
|
5-Dec-19 |
13.10 |
13.00 |
0.10 |
|
2-Jan-20 |
13.15 |
12.95 |
0.15 |
|
6-Feb-20 |
12.90 |
12.65 |
0.05 |
Source:
Zedcrest Dealing Desk
Money
Market
Rates in the
money market trended higher by c.2pct due to the c.N116bn OMO sale which led to
a decline in system liquidity from opening levels of c.N285bn. The OBB and OVN
rates consequently ended the session at 12.00% and 12.67% respectively.
We expect rates
to remain relatively stable tomorrow, as there are no significant outflows
anticipated.
|
Money Market Rates |
||
|
|
Current (%) |
Previous (%) |
|
Open Buy Back (OBB) |
12.00 |
10.58 |
|
Overnight (O/N) |
12.67 |
11.58 |
Source: FMDQ, Zedcrest
Research
FX Market
At the Interbank, the Naira/USD
rate strengthened by 0.02% to N306.90/$ at the spot market, while the SMIS rate
remained unchanged at N356.92/$. The NAFEX closing rate in the I&E window appreciated
by 0.13% to N360.13/$, while the cash and transfer rates at the parallel market
remained unchanged at N357.80/$ and N364.00/$ respectively.
|
FX Market |
||
|
|
Current (N/$) |
Previous ( N/$) |
|
CBN Spot |
306.90 |
306.95 |
|
CBN SMIS |
356.92 |
356.92 |
|
I&E FX Window |
360.13 |
360.61 |
|
Cash Market |
357.80 |
357.80 |
|
Transfer Market |
364.00 |
364.00 |
Source: CBN, FMDQ, REXEL
BDC
Eurobonds
The NGERIA Sovereigns remained bullish,
with yields lower by c.7bps on average. The most demand was still witnessed in
the belly of the curve which gained c.0.60pct on the day.
In the NGERIA Corps, we witnessed slight
interests on the FBNNL 21s and FIDBAN 22s.
Related News
1. NAFEX Rate Weakens
as Turnover Dips to c.$100m
2. Money Market Rate
Increased As Overnight Rate Rose To 11.67%
3. Bond Market Trades
Flat, Despite Inflation Dip
4. CBN Delivers Further
Cut to Stop Rate in c.N400bn OMO Sale
5. Robust Demand Sees
Significant Drop in T-bills Yields at The PMA
6. One Year T-bill to
Clear Significantly Lower at PMA Tomorrow
7. Nigerian Eurobonds
Turn Bullish as Oil Prices Move Higher
8. Increased OMO Mop-Ups by CBN Drive T-Bills Average Yield
up to 13.5% as PMA Holds this Wednesday
9. Money Market Rate
Decreased As Overnight Rate Fell To 10.08%
10. Monthly Fixed Income
Review For February 2019
11. T-Bill Yields Trend
Lower as CBN Holds off on Long Tenor OMO Offer
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