| Bonds & Fixed Income |    6021 VIEWS  |
| Bonds & Fixed Income | |
| 6021 VIEWS | |
 |
Wednesday, January 09, 2018/ 07:30AM / Zedcrest Capital
***Minimum Wage: FG, Labour agree on Jan. 23 for
transmission of bill***
KEY
INDICATORS
|
Indicator |
Value |
Commentary |
|
Inflation |
11.28% |
As at December 14, 2018. A c.2bps increase from 11.26% recorded
in October 2018 |
|
MPR |
14.00% |
Left Unchanged for the 12th Consecutive Time at the
Nov. 22, 2018 MPC Meeting |
|
External Reserves |
$43.04bn |
As at January 7, 2018. A c.0.05% decrease from $43.06bn on January
3, 2018 |
|
Brent Crude |
$58.49pb |
As at January 8, 2019. A c.0.74% increase from $58.06pb on January 7, 2018 |
Bonds
The Bond market remained scantily traded, with slight interests
around the short and mid tenors compressing yields further by c.4bps on
average.
We expect yields to remain pressured lower in the near term as
demand interests currently outweigh supply of bonds in the market. We however
expect yields to resume an uptrend towards the monthly bond auction by the DMO.
|
Benchmark
FGN Bonds |
|||
|
Description |
Bid (%) |
Offer (%) |
Day Change
(%) |
|
15.54 13-Feb-20 |
14.98 |
14.48 |
(0.11) |
|
14.50 15-Jul-21 |
15.49 |
15.29 |
(0.17) |
|
16.39 27-Jan-22 |
15.09 |
14.87 |
(0.02) |
|
14.20 14-Mar-24 |
15.09 |
14.87 |
(0.03) |
|
12.50 22-Jan-26 |
15.60 |
15.45 |
(0.01) |
|
16.29 17-Mar-27 |
15.47 |
15.35 |
(0.10) |
|
13.98 23-Feb-28 |
15.54 |
15.36 |
0.01 |
|
12.15 18-Jul-34 |
15.50 |
15.24 |
0.00 |
|
12.40 18-Mar-36 |
15.55 |
15.23 |
(0.01) |
|
16.2499 18-Apr-37 |
15.36 |
15.20 |
0.06 |
Source: Zedcrest Dealing Desk
Treasury
Bills
The
T-bills market remained bearish, with yields rising higher by c.10bps as the
CBN further tightened system liquidity via a c.10bn OMO sale.
We expect
yields to remain pressured as market players anticipate continued OMO
interventions by the CBN.
|
|
|||
|
Description |
Bid (%) |
Offer (%) |
Day Change
(%) |
|
14-Feb-19 |
15.75 |
14.40 |
0.50 |
|
14-Mar-19 |
15.00 |
14.20 |
0.00 |
|
4-Apr-19 |
13.10 |
12.25 |
0.10 |
|
2-May-19 |
13.80 |
13.00 |
(0.20) |
|
13-Jun-19 |
13.65 |
13.40 |
(0.10) |
|
18-Jul-19 |
13.70 |
13.50 |
(0.30) |
|
1-Aug-19 |
14.25 |
13.65 |
(0.05) |
|
12-Sep-19 |
15.05 |
14.70 |
(0.05) |
|
3-Oct-19 |
15.05 |
14.45 |
(0.05) |
|
14-Nov-19 |
15.05 |
14.70 |
(0.05) |
|
5-Dec-19 |
15.00 |
14.85 |
(0.10) |
Source: Zedcrest Dealing Desk
Money
Market
Rates in the
money market remained elevated, with the OBB and OVN rates closing the day at
25.00% and 27.25% as system liquidity which is currently estimated to be in negative
territory was further pressured by a c.N10bn OMO sale by the CBN.
We expect rates
to remain at current levels, as there are no significant inflows expected
tomorrow.
|
Money Market Rates |
||
|
|
Current (%) |
Previous (%) |
|
Open Buy Back (OBB) |
25.00 |
25.83 |
|
Overnight (O/N) |
27.25 |
28.00 |
Source: FMDQ, Zedcrest Research
FX Market
At the Interbank, the Naira/USD rate
remained unchanged at N306.90/$ (spot) and N358.13/$ (SMIS). The NAFEX rate in
the I&E window depreciated further by c.0.05% to N365.87/$ from N365.68/$
previously. At the parallel market, the cash rate depreciated by c.0.08% to N359.80/$,
while the transfer rate remained unchanged at N364.00/$.
|
FX Market |
||
|
|
Current (N/$) |
Previous ( N/$) |
|
CBN Spot |
306.90 |
306.90 |
|
CBN SMIS |
358.31 |
358.31 |
|
I&E FX Window |
365.87 |
365.68 |
|
Cash Market |
359.80 |
359.50 |
|
Transfer Market |
364.00 |
364.00 |
Source: CBN, FMDQ, REXEL
BDC
Eurobonds
The NGERIA Sovereigns flattened in today’s
session, having posted strong gains in the last two sessions. Yields ticked
marginally higher by c.1bp on the back of slight weakness on the longer end of
the curve.
In the NGERIA Corps, investors were bullish on the Access 21s Sub, FBNNL 21s, Access 21s snr and FIDBAN 22s.
Related News
1. T-Bills Market Reverses Bullish Run as Average Rate Advances to 14.3%
2. January 2019 FGN Savings Bonds Offer For Subscription
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4. Investors Rally Nigerian Eurobonds as Oil Prices Push Higher
5. Positioning For Headwinds - Zedcrest 2019 Fixed Income Outlook
6. T-Bills Market Trades Bearish as Market Players anticipate Retail FX Funding
7. Bond Yields Retrace Sharply, As DMO Resumes NTB Auction Sales
8. Despite Year End Funding Pressures, CBN Maintains OMO and FX Interventions
9. Naira Crashes Below N360 Per Dollar at the Parallel Market as External Reserves Resume Downtrend
10. Demand Pressures Force c.50bps Rally on 2024 FGN Bond
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