Bonds & Fixed Income | |
Bonds & Fixed Income | |
4420 VIEWS | |
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Saturday, November 24, 2018/ 07:30PM / Zedcrest Capital
***Brent crosses below national budget benchmark,
increases pressure on reserves***
KEY
INDICATORS
Indicator |
Value |
Commentary |
Inflation |
11.26% |
As at November 21, 2018. A c.2bps down from 11.28% recorded in
September 2018 |
MPR |
14.00% |
Left Unchanged for the 12th Consecutive Time at the Nov.
22, 2018 MPC Meeting |
External Reserves |
$41.56bn |
As at November 19, 2018. A c.0.10% decrease from $41.60bn on November
16, 2018 |
Brent Crude |
$59.06pb |
As at November 23, 2018. A c.6.48% decrease from $63.15pb on November 22, 2018 |
Bonds
The Bond market closed the week
on a relatively quiet note, as yields traded flat across the curve. Market
participants continue to trade cautiously in the interim as most investors
expect yields to trend up as election activities begin to kick in.
In the coming week, our
expectations for a weaker market remain in the light of subdued oil prices and
general risk off sentiment on FGN bonds.
Benchmark
FGN Bonds |
|||
Description |
Bid (%) |
Offer (%) |
Day Change
(%) |
15.54 13-Feb-20 |
14.92 |
14.09 |
0.00 |
14.50 15-Jul-21 |
15.36 |
15.21 |
0.00 |
16.39 27-Jan-22 |
14.94 |
14.54 |
0.12 |
14.20 14-Mar-24 |
15.28 |
15.02 |
0.00 |
12.50 22-Jan-26 |
15.64 |
15.46 |
(0.04) |
16.29 17-Mar-27 |
15.69 |
15.58 |
(0.01) |
13.98 23-Feb-28 |
15.85 |
15.80 |
0.03 |
12.15 18-Jul-34 |
15.72 |
15.59 |
(0.02) |
12.40 18-Mar-36 |
15.61 |
15.44 |
0.00 |
16.2499 18-Apr-37 |
15.59 |
15.46 |
(0.01) |
Source: Zedcrest Dealing Desk
Treasury
Bills
The T-bills
market closed the week on a bullish note supported by a very liquid Money
Market. Yields across the T-bills curve compressed further by c.2bps to close
the week at c.13.43% on the average.
We expect the
bullish sentiments to continue into next week with most trading activities
skewed towards the short and long end of the curve.
|
|||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
6-Dec-18 |
12.50 |
11.50 |
0.00 |
3-Jan-19 |
12.75 |
12.40 |
0.00 |
14-Feb-19 |
13.01 |
12.70 |
0.06 |
14-Mar-19 |
13.20 |
12.70 |
0.20 |
4-Apr-19 |
13.00 |
12.65 |
0.00 |
2-May-19 |
13.05 |
12.65 |
0.00 |
18-Jul-19 |
13.00 |
12.70 |
0.00 |
1-Aug-19 |
13.70 |
13.45 |
(0.30) |
12-Sep-19 |
14.50 |
14.25 |
0.00 |
3-Oct-19 |
14.50 |
14.35 |
(0.15) |
14-Nov-19 |
14.50 |
14.30 |
0.00 |
Source:
Zedcrest Dealing Desk
Money
Market
The OBB and
OVN rates ticked higher today to close at 5.83% and 6.58% as liquidity remained
robust despite the expected outflows via CBN FX Retail Intervention and Bond
auction debit. System liquidity is estimated to close today at c.N500bn
We expect
rates to open the coming week higher as market participants provide funding for
FX Wholesale interventions by the CBN.
Money Market Rates |
||
|
Current (%) |
Previous (%) |
Open Buy Back (OBB) |
5.83 |
5.17 |
Overnight (O/N) |
6.58 |
6.08 |
Source: FMDQ, Zedcrest
Research
FX Market
At the Interbank, the Naira/USD
rate remained unchanged to close at N306.75/$ (spot) and N359.81/$ (SMIS). At the
I&E FX window a total of $249.28bn was traded in 354 deals, with rates
ranging between N358.00/$ - N365.60/$. The NAFEX closing rate depreciated by
c.0.16% to N364.70/$ from N364.10/$ previously.
At the parallel market segment, the
cash and transfer rates both remained unchanged to close N364.00/$ and N366.50/$
respectively.
FX Market |
||
|
Current (N/$) |
Previous ( N/$) |
CBN Spot |
306.75 |
306.75 |
CBN SMIS |
359.81 |
359.81 |
I&E FX Window |
364.70 |
364.10 |
Cash Market |
364.00 |
364.00 |
Transfer Market |
366.50 |
366.50 |
Source: CBN, FMDQ, REXEL
BDC
Eurobonds
Bad news for
Sub-Saharan Africa’s government debt, especially the NGERIA Sovereigns, as investors sold off oil related sovereign debt
notes in reaction to the continuous decline in Oil prices. Oil prices today
crossed the $60pb mark, trading at $59.06pb, the lowest level seen since
October 2017.
Consequently,
Yields on the NGERIA Sovereigns inched up further by c.16bps on the average
across the curve. Major losers include NIGERIA 27s losing c.30bps on the day
while the 30s & 31s both closed the session c.19bps higher.
NGERIA Corps tickers also showed weakness across most tracked
tickers. Yields expanded the most on the DIAMBK 19s, Zenith 19s and 22s papers
by c.129bps, c.64bps and c.41bps respectively.
Related News
1. Stanbic IBTC -
Offer For Subscription Of N30b Series 1 Senior Unsecured Fixed Rate Notes
2. Monetary Policy Remains Unchanged With Minimal Volatility
Expected For The Fixed Income Market
3. Summary of November 2018 FGN Bond Auction Results
4. November 2018 FGN Bond Auction: DMO Allots N39.52bn FGN
Bonds to Investors
5. FGN Bond Auction Undersubscribed by 11% Amidst Weak
Investor Appetite
6. Nigerian Fixed Income Market Stays Calm Ahead of MPC
Meeting
7. Average T-Bills Rate Closed Up at 13.1% Following
Sell-Offs by Investors
8. Nigerian Eurobonds rise 45bps W-on-W as Bearish Sentiments
Trail Eurobond Launch