Tuesday, February 13, 2018, 10.00PM/Zedcrest Capital
***Nigerian Govt. To Auction N100bn Bonds on Feb. 21 *** - DMO
The bond market traded on a relatively flat note, with slight interests on the long end of the curve, offset by some sell on the short end. Yields inched higher by c.2bps, as the DMO released its FGN bond offer circular, showing a total intended offer of N50bn each of the 2021 and the new 10-yr 2028 bond. We expect yields to maintain a downward trend on the back of expectations of a lower inflation rate figure.
The T-bills market traded with mixed sentiments, primarily driven by the liquidity positions of the respective market participants. On the average, yields inched slightly higher by c.6bps to 15.44%. The CBN issued a No-Sale OMO result despite a total subscription of c.N18bn on the 247-day bill offered. We expect yields to trend downwards tomorrow, as inflows from retail funds further bolstered market liquidity. Inflows from maturing OMO bills on Thursday are also expected to strengthen bullish sentiments, as market players watch closely for the import of the NO-sale result for today’s OMO auction.
There will be an NTB auction tomorrow with N6bn, N30bn and N140bn worth of 91, 182 and 364 day bills on offer. See our expectations below:
The OBB and OVN rates declined slightly to 14.33% and 15.33% respectively, on the backdrop of inflows from Bond coupon payments and anticipated inflows for retail refunds. System liquidity is estimated to close today at c.N200bn positive, as the anticipated inflows from retail refunds came in towards the close of the day. We consequently expect rates to crash to single digit levels tomorrow.
The CBN Official spot rate remained stable at its previous day rate of N305.90/$, with external reserves recorded to have improved by 1.73% to $41.09bn as at 8th of February, 2018.
The spot rate in the Investors and Exporters’ FX Window depreciated by 0.03% to close at N360.22/$ from N360.10/$ in the previous session.
Rates in the Unofficial market also depreciated by 0.06% to N361.40/$.