Bonds & Fixed Income | |
Bonds & Fixed Income | |
4264 VIEWS | |
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Tuesday, April 2, 2019 07:32 AM / Zedcrest Capital
***Oil
Hits 2019 High as Demand Outlook Brightens***
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 |
13.50% |
Cut by 50bps to 13.50% at the Mar. 26, 2019
MPC Meeting |
External Reserves |
$44.34bn |
As at March 28, 2019. A c.0.23% increase
from $44.24bn on March 27, 2019 |
Brent Crude |
$69.01pb |
As at April 1, 2019. A c.3.82% increase from $66.47pb
on March 29, 2019 |
Bonds
The FGN Bond market opened the month on a relatively flat note,
with slight demand on the 2025s offset by sell pressures on other maturities.
Average bond yields consequently remained unchanged at 14.35%.
The market has maintained a slightly bearish posture in recent
sessions, with some players still looking to take profit at current levels. We
expect this trend to persist in the near term.
Benchmark
FGN Bonds |
|||
Description |
Bid (%) |
Offer (%) |
Day Change
(%) |
14.50 15-Jul-21 |
14.49 |
13.97 |
(0.03) |
16.39 27-Jan-22 |
14.32 |
14.02 |
0.04 |
12.75 27-Apr-23 |
14.19 |
13.81 |
0.02 |
14.20 14-Mar-24 |
14.35 |
13.91 |
0.01 |
13.53 23-Mar-25 |
14.20 |
14.08 |
(0.21) |
12.50 22-Jan-26 |
14.46 |
14.26 |
(0.01) |
16.29 17-Mar-27 |
14.42 |
14.24 |
0.01 |
13.98 23-Feb-28 |
14.42 |
14.23 |
0.09 |
12.15 18-Jul-34 |
14.36 |
14.29 |
0.02 |
12.40 18-Mar-36 |
14.30 |
14.20 |
0.01 |
16.2499 18-Apr-37 |
14.30 |
14.11 |
0.02 |
Source: Zedcrest Dealing
Desk
Treasury
Bills
The T-bills market
We expect the slight moderation in yields to persist as
market players look ahead to the NTB auction scheduled to hold on Wednesday.
Benchmark Treasury Bills |
|||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
4-Apr-19 |
11.25 |
9.00 |
0.25 |
2-May-19 |
12.25 |
11.70 |
0.00 |
13-Jun-19 |
12.00 |
11.15 |
(0.20) |
18-Jul-19 |
12.20 |
12.00 |
0.10 |
1-Aug-19 |
13.25 |
13.00 |
0.00 |
12-Sep-19 |
12.95 |
12.90 |
(0.05) |
3-Oct-19 |
13.10 |
12.85 |
(0.20) |
14-Nov-19 |
12.95 |
12.80 |
(0.20) |
5-Dec-19 |
12.80 |
12.75 |
(0.15) |
2-Jan-20 |
12.95 |
12.75 |
(0.10) |
6-Feb-20 |
11.25 |
9.00 |
0.25 |
Source:
Zedcrest Dealing Desk
Money
Market
Rates in the
money market fell by c.5pct down to single digit levels as system liquidity was
bolstered significantly to c.N325bn positive following the inflows from FAAC
payments in the previous session, even as the CBN continued to hold off on an
OMO auction.
We expect rates
to remain relatively stable, barring a renewed OMO sale by the CBN.
Money Market Rates |
||
|
Current (%) |
Previous (%) |
Open Buy Back (OBB) |
9.86 |
10.07 |
Overnight (O/N) |
10.67 |
10.71 |
Source: FMDQ, Zedcrest
Research
FX Market
At the Interbank, the Naira/USD
rate remained unchanged at N306.95/$ (spot) and N355.78/$ (SMIS). The NAFEX
closing rate in the I&E window appreciated by 0.02% to N360.60/$, whilst
market turnover dipped by 57% to $156m. At the parallel market, the cash rate fell
back to N358.30/$ whilst the transfer rate remained unchanged at N364.00/$.
FX Market |
||
|
Current (N/$) |
Previous ( N/$) |
CBN Spot |
306.95 |
306.95 |
CBN SMIS |
355.78 |
355.78 |
I&E FX Window |
360.60 |
360.68 |
Cash Market |
358.30 |
357.50 |
Transfer Market |
364.00 |
364.00 |
Source: CBN, FMDQ, REXEL BDC
Eurobonds
Investors
remained slightly bullish on the NGERIA
Sovereigns, with yields declining further by c.6bps on the day. This is
coming as growth fears in developed markets subside and investors renew risk on
bets in choice EM assets.
In the NGERIA Corps, we witnessed renewed
interests on the UBANL 22s.
Related News
1. Access Bank
Lists Pioneer N15bn Nigerian Green Bond At FMDQ OTC
2. Average Money Market Rate Fell By 4.28% To Settle At
10.27%
3. United Capital Shares Insights as Lead Issuing House of
NSP Green Bond
4. April 2019 FGN Savings Bonds Offer For Subscription
5. Funding Rates Close Stable as FAAC Inflows Bolster System
Liquidity
6. Bond Market
Trades Flat, Despite Significant Cut in Auction Rates
7. Summary of March 2019 FGN Bond Auction Results
8. Bond Auction Rates Crash by 125bps Following N92bn
Non-Competitive Sales
9. Renewed Bullish Sentiments Anticipated Following MPR Cut
10. Funding Rates Spike as Banks Fund for CBN’s Wholesale
Auction
11. Average Money Market Rate Rose By 3.12% To Settle At
14.54%
12. Weak German Data, UST Curve Inversion Weigh on EM Risk
Assets
13. I and E Turnover Rebounds to c.$700m as CBN Re-Issues Long
Tenor OMO Bill