Average T-Bills Rates Settle At 11.4% as June Inflation Prints At 11.2% Ahead Of MPC Meeting

Proshare

Tuesday, July 24, 2018 12:50PM / Afrinvest 

Last week, the bullish run persisted for the third week as average rates in the Treasury Bills (“T-Bills”) declined 30bps W-o-W to 11.4% as against 11.7% the previous week. 

We witnessed buying interest across the curve especially the short-term bills which declined 50bps W-o-W from 11.4% to 10.9% due to high demand for the 20-Sep-18 and 11-Oct-18 both declining 197bps and 126bps respectively. In the same vein, the medium and long-term instruments shed 30bps and 14bps respectively. 

There was a T-Bills Primary Market Auction (“PMA”) last Wednesday which was fully subscribed and allotted save for the 364-day instrument that was 0.5x allotted (Details presented below). Additionally, the CBN offered N100.0bn and N450.0bn for the 91-day and 210-day bills respectively in an OMO Auction last Thursday of which 60.8% of the 91-day bill was subscribed and allotted while 96.8% of the 210-day bill was subscribed and allotted.

 Proshare Nigeria Pvt. Ltd.

This week, OMO maturity of N404.3bn is scheduled to hit the system on Thursday which is expected to be mopped up by a corresponding OMO Auction. We also expect coupon inflow of N117.4bn to ease tight system liquidity (N28.1bn negative as at Friday). Hence, we anticipate rates would hover around current levels.

Please find below rates for today: 


Maturity

Tenor (Days)

Rate (%) p.a.

Yield (%) p.a.

20-Sep-18

59

8.50

8.62

8-Nov-18

108

9.80

10.09

13-Dec-18

143

10.80

11.28

10-Jan-19

171

10.90

11.49

14-Feb-19

206

11.10

11.85

OMO Auction

200-300

11.30

12.05-12.46

18-Jul-19

360

10.70

11.96

Rates are valid till 1:45pm today (23-Jul-18)


FGN Bonds Market Update: Sell-Offs Taper as Average Bond Yields Dips Marginally by 3bps to 13.9%

 

Last week, average yield on benchmark bonds dipped slightly by 3bps lower from 13.88% the previous week to 13.85%as yields become attractive for domestic institutional investors.  Yields across the short, medium and long-term bonds closed the week at 13.0%, 13.7% and 14.1%respectively as we continue to see a normalization of the yield curve. 

This week, we anticipate the bearish trend will be sustained on the back of tight system liquidity. In addition, we expect guarded trading by market players on the back of June Inflation figure (11.2%) released 8:15am this morning, MPC Committee meeting outcome tomorrow and marginal rate of Wednesday's FGN Bond Auction.

A total of N117.4bn worth of FGN Bond coupon is scheduled to be paid out this week as detailed below:

 

Bond

Coupon Payment Date

Expected Amount (N bn)

Jan-26

23-Jul-18

38.2

Jul-30

23-Jul-18

29.6

Jan-20

27-Jul-18

49.6

Total:

117.4

 

Please see below indicative bond rates for today:

Bond

Tenor (Years)

Yield (%)

Coupon (%)

Implied Price (N)

Feb-20

2

           12.75

            15.54

                  103.85

Jul-21

3

           13.30

            14.50

                  102.89

Jan-22

4

           13.15

            16.39

                  108.91

Mar-24

6

           13.50

            14.20

                  102.66

Jan-26

8

           13.95

            12.50

                    93.37

Mar-27

9

           13.80

            16.29

                  112.31

Jul-34

16

           14.10

            12.15

                    87.73

Mar-36

18

           14.05

            12.40

                    89.27

Apr-37

19

           14.08

            16.25

                  114.14

Rates are valid till 1:45pm today (23-Jul-18)

Proshare Nigeria Pvt. Ltd.


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