Bonds & Fixed Income | |
Bonds & Fixed Income | |
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Wednesday, January 24, 2018/ 09:00AM / Zedcrest Capital
***VAT will be increased in 2019*** - Finance Minister
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% |
MPC Meeting to be held on the 21st and 22nd of January 2019 |
External Reserves |
$43.12bn |
As at January 22, 2019. A c.0.01% decrease from $43.13bn on January
21, 2019 |
Brent Crude |
$60.69pb |
As at January 23, 2019. A c.1.51% decrease from $61.62pb on January 22, 2018 |
Bonds
The Bond market traded on a relatively flat note, with yields
compressing marginally by c.1bp on the day following slight interests on some
mid tenors.
The DMO has released the Q1 FGN
bond Calendar, with N150bn on offer at the auction
scheduled for the 30th of January. Given the sizeable volumes of bonds on
offer, we expect yields to trend progressively higher towards the auction, as
demand interests’ wane.
Benchmark
FGN Bonds |
|||
Description |
Bid (%) |
Offer (%) |
Day Change
(%) |
15.54 13-Feb-20 |
15.51 |
14.98 |
0.00 |
14.50 15-Jul-21 |
15.50 |
15.19 |
0.00 |
16.39 27-Jan-22 |
15.03 |
14.78 |
(0.04) |
14.20 14-Mar-24 |
15.12 |
14.93 |
(0.01) |
12.50 22-Jan-26 |
15.33 |
15.15 |
(0.03) |
16.29 17-Mar-27 |
15.22 |
15.06 |
(0.02) |
13.98 23-Feb-28 |
15.42 |
15.22 |
0.03 |
12.15 18-Jul-34 |
15.39 |
15.05 |
(0.01) |
12.40 18-Mar-36 |
15.21 |
15.11 |
0.02 |
16.2499 18-Apr-37 |
15.26 |
14.97 |
(0.01) |
Source: Zedcrest Dealing Desk
Treasury
Bills
The
T-bills market remained bullish, with yields compressing further by c.20bps
following continued interests by market players around the short and mid tenors
(Feb – Jul). The long end of the curve however traded flat on the back of the
continued OMO interventions by the CBN. The CBN sold a total of c.N65bn at
today’s OMO auction, with c.77% of the total demand skewed towards the long
tenor (19-Dec) and rates maintained across all tenors.
We expect yields to remain relatively stable, with slight pressures expected on the longer end of the curve as the CBN is expected to float a sizeable OMO auction to mop up c.N383bn OMO maturities tomorrow.
|
|||
Description |
Bid (%) |
Offer (%) |
Day Change
(%) |
14-Feb-19 |
14.05 |
13.50 |
0.00 |
14-Mar-19 |
14.05 |
12.00 |
0.00 |
4-Apr-19 |
14.05 |
13.40 |
0.00 |
2-May-19 |
12.90 |
12.50 |
(0.10) |
13-Jun-19 |
13.30 |
13.00 |
0.10 |
18-Jul-19 |
13.50 |
13.30 |
0.30 |
1-Aug-19 |
13.75 |
13.55 |
(0.75) |
12-Sep-19 |
14.90 |
14.25 |
0.00 |
3-Oct-19 |
14.90 |
14.50 |
(0.10) |
14-Nov-19 |
14.70 |
14.45 |
(0.15) |
5-Dec-19 |
14.90 |
14.65 |
0.00 |
Source: Zedcrest Dealing Desk
Money
Market
Rates in the
money market moderated slightly by c.2pct on the back of the slightly improved
system liquidity levels currently estimated at c.N30bn positive.
We expect
funding rates to moderate further tomorrow, with inflows from OMO maturities
expected to further bolster system liquidity levels. This should however be
moderated by an expected sizeable OMO sale by the CBN.
Money Market Rates |
||
|
Current (%) |
Previous (%) |
Open Buy Back (OBB) |
15.00 |
17.50 |
Overnight (O/N) |
15.67 |
19.08 |
Source: FMDQ, Zedcrest Research
FX Market
At the Interbank, the Naira/USD
rate remained unchanged at N306.80/$ (spot) and N357.97/$ (SMIS). The NAFEX rate
in the I&E window depreciated marginally by c.0.04% to N362.58/$, while
total traded volumes plunged by c.73% to c.$91m. Cash and transfer rates in the
parallel market also depreciated by c.0.14% to N361.80/$ and N365.50/$
respectively.
FX Market |
||
|
Current (N/$) |
Previous ( N/$) |
CBN Spot |
306.80 |
306.80 |
CBN SMIS |
357.97 |
357.97 |
I&E FX Window |
362.58 |
362.42 |
Cash Market |
361.80 |
361.30 |
Transfer Market |
365.50 |
365.00 |
Source: CBN, FMDQ, REXEL
BDC
Eurobonds
The NGERIA Sovereigns traded on a bullish
note, with yields compressing by c.9bps, with demand mostly on the 2032s and 2047s
which compressed by c.12bps on the day.
The NGERIA Corps were relatively quiet, with
bids weaker on the DIAMBK 19s and demand still firm on the SEPLLN 23s.
Related News
1. Union Bank of
Nigeria Plc Series 1 and 2 Commercial Paper Offer Now Open
2. Offshore Demand Keeps T-bill Yields Moderated as Funding
Rates Soar
3. Money Market Rate Decreased As Overnight Rate Fell To
16.17%
4. Bond Yields Retrace Slightly, as Demand Pressures Wane
5. Access Bank
Seeks Regulatory Approval In Respect Of A Proposed N15bn Green Bonds Issuance
6. Bond Yields Break Key Support as Offshore Inflows Push I
and E Rate to 4-Month Low
7. Mixta Real Estate Plc: Listing of N2,961,000,000
Guaranteed and N2,320,000,000 Secured Bonds
8. Weak Demand Sends 1yr PMA Rate 50bps Higher
9. NSE Lists N32,899,000,000 Series II, 7 year 16.25% Fixed
Rate Unsecured Bonds of Sterling Investment
10. Bond Yields Test Key Support as Offshore Inflows Bolster
NAFEX Rate
11. Treasury Bill Auction Schedule For January 16th, 2019