Nigerian Inflation Up By 0.66% in the Month of November

Proshare

Wednesday, December 16, 2020 / 8:05 AM / By Zedcrest Capital / Header Image Credit: CGTN Africa


Proshare Nigeria Pvt. Ltd.


FGN Bonds

It was quite an active day in FGN bond space, although the market trades' chunks were closed by the later part of the day. Market activity flowed from the belly to the curve's tail with transactions ranging between 7.10%-7.15% for the mid-dated bonds and 7.45-7.55 for the long. The market was also interested in the SUKUK bond, especially the 2027 maturity, although the bid/offer stood apart at 5.50%/5.15%, making it difficult to close. 

The short end of the curve has been quiet in recent times. However, the market saw some order-driven bid for the 2026s paper as its bid started off the day at 5.35% but gradually drop by 15bps albeit small volume met this bid for a trade. 

We expect the trading rush to slow significantly tomorrow as market participant's attention shifts to the FGN bond auction scheduled to hold tomorrow.

 

Benchmark FGN Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

 

16.39 27-Jan-22

3.43

1.90

0.08

 

12.75 27-Apr-23

3.61

1.94

0.16

 

14.20 14-Mar-24

3.64

2.15

(0.11)

 

13.53 23-Mar-25

4.65

2.47

0.00

 

12.50 22-Jan-26

5.94

4.98

(0.06)

 

16.29 17-Mar-27

5.95

5.30

(0.10)

 

13.98 23-Feb-28

5.85

5.34

(0.15)

 

14.55 26-Apr-29

6.50

5.28

0.50

 

12.15 18-Jul-34

7.20

6.90

(0.25)

 

12.50 27-Mar-35

7.25

6.90

(0.20)

 

12.40 18-Mar-36

7.30

6.95

(0.15)

 

16.2499 18-Apr-37

7.50

7.00

0.05

 

9.80 24-Jul-45

7.85

7.00

0.35

 

14.80 26-Apr-49

7.60

7.30

(0.05)

 

12.98 27-Mar-50

7.60

7.30

(0.05)

 

 

Treasury Bills

For T-bills, the market witnessed an order-driven rush for the last issued 1yr NTB bill (09 Dec maturity) with bids ranging between 0.65-0.70 as the market ignored the similarly traded OMO bill (07 Dec Maturity) despite been offered better at 1.00%. 

We also saw a bit of interest in the Jan-Mar bill, which became an unexplainable scare in the market despite been offered at a 0.30% level during yesterday's trading session. Nonetheless, we saw a slight movement on the NTB curve, which compressed slightly by 1bps. 

We expect a less active day tomorrow, as dealers would most likely be interested in the NTB auction outcome, especially for the 1yr bill. 

 

Primary Market Auction Expectation

NTB - 16 Dec 2020

 

Tenor

Offer (N'bn)

Expected Rate (%)

Previous Rate (%)

91 days

2.00

0.01-0.05

0.0100

182 days

2.00

0.30-0.60

0.6000

364 days

3.00

0.60-1.10

3.2000

 

FGN Bonds Expectation - December 2020

Tenor

Offer (N'bn)

Expected Stop Rate (%)

Previous Stop Rate (%)

Mar-35

30.00

6.45-6.60

5.000

Jul-45

30.00

6.50-7.00

5.785

 

 

Benchmark OMO Bills

Description

Bid (%)

Offer (%)

Day Change (%)

NGOMOB 0 01/05/21

5.00

0.15

0.00

NGOMOB 0 02/02/21

5.00

0.20

0.00

NGOMOB 0 03/02/21

5.00

0.20

(0.50)

NGOMOB 0 05/11/21

6.00

0.30

0.00

NGOMOB 0 06/08/21

6.50

0.30

0.50

NGOMOB 0 08/10/21

6.50

0.35

0.00

NGOMOB 0 09/07/21

6.50

0.50

0.00

NGOMOB 0 10/19/21

7.00

0.50

0.00

 

 

Benchmark NTBills

Description

Bid (%)

Offer (%)

Day Change (%)

NIGTB 0 12/31/20

5.00

0.15

0.00

NIGTB 0 01/14/21

5.00

0.15

0.00

NIGTB 0 02/11/21

5.00

0.20

(0.50)

NIGTB 0 03/11/21

5.00

0.30

(0.50)

NIGTB 0 04/29/21

6.00

0.30

0.50

NIGTB 0 05/13/21

6.00

0.30

0.00

NIGTB 0 06/10/21

6.50

0.35

0.50

NIGTB 0 07/01/21

6.50

0.35

0.00

NIGTB 0 08/26/21

6.50

0.35

0.00

NIGTB 0 09/09/21

7.00

0.50

0.00

NIGTB 0 10/14/21

7.00

0.65

0.00

 

Money Markets

Interbank rates remained low, supported by excess system liquidity levels. The markets opened c. N668.12BN, 74.60% higher than the previous session as inflows from OMO repayments hit the system, consequently pushing rates down to close at 0.63% and 0.94% for OBB and OVN rates, respectively.

We expect rates to stay at these levels for tomorrow since the market does not foresee any significant outflow that may push rates north.

 

Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

0.63

0.67

Overnight (O/N)

0.94

1.08

 

FX Market

The FX market was reasonably stable today as the rate stayed unchanged on all the market segments, although the FX sales from CBN recently at the IEFX were expected to have calmed rates slightly at the cash/transfer window.

 

FX Market

Current (N/$)

Previous (N/$)

CBN Spot

379.00

379.00

CBN SMIS

380.69

380.69

I&E FX Window

394.10

394.00

Cash Market

475.00

473.50

Transfer Market

490.00

489.00

 

Eurobonds

It was a quiet session for the NIGERIA Sovereigns today, as sentiments were mixed across the sovereign curve. Demand persisted on the 2025s and 2027s papers, while offers at the long end increased. Sub-Saharan African sovereign papers closed the session slighter stronger, led by the ANGOLA papers.

The NIGERIA Corporates had another quiet session, with the significant mover been the SEPPLN 2021 bond shedding c.8bps.


Proshare Nigeria Pvt. Ltd. 




Proshare Nigeria Pvt. Ltd. 



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