Bonds & Fixed Income | |
Bonds & Fixed Income | |
3740 VIEWS | |
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Wednesday, February 27, 2019 06:00 AM / Zedcrest Capital
***Shell says
Nigeria tax claim will delay Bonga oilfield***
KEY
INDICATORS
Indicator |
Value |
Commentary |
Inflation |
11.37% |
As at February 15, 2019. A c.7bps decline
from 11.44% recorded in December 2018 |
MPR |
14.00% |
Left Unchanged for the 15th
Consecutive Time at the Jan. 22, 2019 MPC Meeting |
External Reserves |
$42.38bn |
As at February 22, 2019. A c.0.35%
decrease from $42.53bn on February 21, 2019 |
Brent Crude |
$65.32pb |
As at February 26, 2019. A c.0.68% increase from $64.88pb
on February 25, 2019 |
Bonds
The
FGN Bond market remained relatively stable with yields marginally lower by
c.1bp on the day. Investors remained slightly bullish, but the strength of the
demand had waned from the stance in the previous session.
We
expect investors to become slightly cautious as we edge closer to announcements
of the final election results.
Benchmark FGN Bonds |
|||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
14.50 15-Jul-21 |
14.94 |
14.48 |
(0.02) |
16.39 27-Jan-22 |
14.72 |
14.57 |
(0.04) |
14.20 14-Mar-24 |
14.45 |
14.34 |
0.01 |
12.50 22-Jan-26 |
14.51 |
14.27 |
(0.08) |
16.29 17-Mar-27 |
14.55 |
14.40 |
0.00 |
13.98 23-Feb-28 |
14.57 |
14.53 |
(0.02) |
12.15 18-Jul-34 |
14.52 |
14.20 |
0.02 |
12.40 18-Mar-36 |
14.50 |
14.31 |
0.00 |
16.2499 18-Apr-37 |
14.39 |
14.24 |
0.00 |
Source: Zedcrest Dealing Desk
Treasury Bills
The T-bills market traded on a firmly bullish note,
with increased demand witnessed mostly on the longer end of the curve. This came
on the backdrop of the contiuned absence of a CBN OMO sale for the third
consecutive session.
The CBN on behalf of the FG will conduct an NTB auction
tomorrow, with a total of c.N115bn T-bills on offer. Given the increased long
tenor demand and in view of the relatively lower volumes on offer, we expect
stop rates to clear signifcantly lower from their previous levels. The rate of
demand aggresiveness should however be moderated by expectations for a renewed
OMO offering by the CBN come Thursday.
NTB PMA
Expectations |
|||
Tenor |
Offer
(N'bn) |
Expected
Rate (%) |
Previous
Rate (%) |
91 days |
24.37 |
10.65 -
10.95 |
10.97 |
182 days |
38.75 |
12.75 -
13.05 |
13.40 |
364 days |
51.99 |
14.35 -
14.65 |
14.95 |
Treasury Bills |
|||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
14-Mar-19 |
9.50 |
8.50 |
0.00 |
4-Apr-19 |
11.50 |
10.00 |
0.00 |
2-May-19 |
12.00 |
10.75 |
0.00 |
13-Jun-19 |
12.10 |
10.50 |
0.00 |
18-Jul-19 |
12.75 |
12.45 |
0.00 |
1-Aug-19 |
12.80 |
12.30 |
0.00 |
12-Sep-19 |
14.00 |
13.75 |
(0.15) |
3-Oct-19 |
14.55 |
14.25 |
(0.05) |
14-Nov-19 |
14.65 |
14.25 |
(0.25) |
5-Dec-19 |
14.70 |
14.40 |
(0.25) |
2-Jan-20 |
14.75 |
14.25 |
(0.25) |
Source: Zedcrest Dealing Desk
Money Market
Rates
in the money market moderated further by c.5pct as system liquidity improved to
c.N110bn in absence of the regular CBN OMO auctions
We
expect rates to remain relatively unchanged as there are no significantly
inflows expected tomorrow. Market players however anticipate significant
inflows from FAAC payments before weekend.
Money
Market Rates |
||
|
Current
(%) |
Previous
(%) |
Open
Buy Back (OBB) |
13.79 |
17.64 |
Overnight
(O/N) |
14.71 |
18.79 |
Source: FMDQ, Zedcrest Research
FX Market
At the Interbank, rates remained unchanged at
N306.85/$ (Spot) and N356.97/$ (SMIS). The NAFEX rate in the I&E window remained
relatively unchanged at N361.50/$. At the parallel market, the cash and
transfer rates remained unchanged at N357.80/$ and N365.50/$ respectively.
FX
Market |
||
|
Current
(N/$) |
Previous
( N/$) |
CBN
Spot |
306.85 |
306.85 |
CBN
SMIS |
356.97 |
356.97 |
I&E
FX Window |
361.50 |
361.54 |
Cash
Market |
357.80 |
357.80 |
Transfer
Market |
365.50 |
365.50 |
Source: CBN, FMDQ, REXEL BDC
Eurobonds
The NGERIA Sovereigns traded relatively flat, with yields marginally
lower by c.1bp on the day.
In the NGERIA Corps, we witnessed slight interests on the ACCESS 21s Sub,
FBNNL 21s and ECOTRA 21s. Bids however remained relatively weak on the DIAMBK
19s.
Related News
1.
Coupon Payments
Bolster Demand on 10-year FGN Bond
2.
Bullish Sentiment Resurfaces as Average Yield Retreat to
14.2%
3.
Money Market Rate Increased As Overnight Rate Rose to
20.25%
4.
Investors Remain Bullish on FGN Bonds Ahead of Elections
5.
FMDQ Admits Mixta Real Estate (Nigeria) PLC Bonds and
Commercial Papers
6.
Market Players Oversubscribe 1-year CBN OMO bill by 181%
7.
Summary of February 2019 FGN Bond Auction Results
8.
February 2019 FGN Bond Auction Oversubscribed
9.
Market Players Oversubscribe FGN Bond Auction by 156%
10. T-bill Yields Compress as Funding Pressures Ease
11. CBN Avoids OMO
Sale, as System Liquidity Dips to Negative