Bonds & Fixed Income | |
Bonds & Fixed Income | |
3018 VIEWS | |
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Friday, September 21, 2018 07:30PM / Zedcrest Capital
***NNPC’s trading surplus rises to N17bn in one month***
KEY
INDICATORS
Indicator |
Value |
Commentary |
Inflation |
11.23% |
As at September14,
2018,9bps up from 11.14% recorded in July 2018. |
MPR |
14.00% |
Next MPC
meeting scheduled for September 24 & 25, 2018 |
External
Reserves |
$44.94bn |
As atSeptember 19,
2018. A c.0.13% decrease from $45.00bnon Sept. 18, 2018 |
Brent Crude |
$79.45pb |
As at September21,
2018. A c.1.43% increasefrom$78.31pbon
Sept. 20, 2018 |
Bonds
Yields
in the bond market compressed further by c.13bps in today’s session, capping a
23bps w/w decline in yields. This came on the back of renewed local client
interests mostly on the short and mid tenured bonds. We witnessed the most
interests today on the 2020, 2021 and 2027 bonds, while other tenors compressed
slightly in response to the mild bullish sentiments.
In
the coming week, we expect a slight reversal to this trend, with bids expected
to weaken in anticipation of the forthcoming bond auction. Whilst not
discounting the renewed interests from clients in recent sessions, we do not
expect yields to break below a c.15.00% support level on the mid to long end of
the curve.
Secondary Market Bonds |
|||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
15.54
13-Feb-20 |
13.86 |
13.26 |
(0.57) |
14.50
15-Jul-21 |
15.17 |
14.97 |
0.00 |
16.39
27-Jan-22 |
14.71 |
14.33 |
(0.30) |
14.20
14-Mar-24 |
15.02 |
14.78 |
(0.08) |
12.50
22-Jan-26 |
15.10 |
15.09 |
(0.10) |
16.29
17-Mar-27 |
15.15 |
15.07 |
(0.03) |
13.98
23-Feb-28 |
15.19 |
15.09 |
(0.05) |
12.15
18-Jul-34 |
15.37 |
15.27 |
(0.03) |
12.40
18-Mar-36 |
15.35 |
15.30 |
(0.05) |
16.2499
18-Apr-37 |
15.34 |
15.28 |
(0.05) |
Source: Zedcrest Dealing Desk
Treasury Bills
In the coming week, we expect yields to
remain relatively stable, as the CBN has begun to show some temperance for
liquidity in the system.
Secondary Market Treasury
Bills
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
4-Oct-18 |
10.55 |
9.00 |
(0.45) |
1-Nov-18 |
12.55 |
11.50 |
0.05 |
6-Dec-18 |
12.50 |
12.00 |
(0.15) |
3-Jan-19 |
12.30 |
12.05 |
(0.35) |
14-Feb-19 |
12.85 |
12.60 |
(0.15) |
14-Mar-19 |
12.55 |
12.25 |
(0.05) |
4-Apr-19 |
12.65 |
12.35 |
0.00 |
18-Jul-19 |
13.00 |
12.50 |
0.20 |
1-Aug-19 |
13.20 |
12.70 |
(0.30) |
Source: Zedcrest Dealing Desk
Money
Market
The OBB and
OVN rates remained stable, closing today at 4.00% and 4.75% respectively, as there
were no significant outflows from the system which opened the day at c.N518bn
positive.
In the coming week, we expect rates to remain moderated with inflows from OMO maturities and FAAC payments expect to offset outflows for CBN’s OMO and FX auctions.
Money Market Rates |
||
|
Current (%) |
Previous (%) |
Open
Buy Back (OBB) |
4.00 |
4.17 |
Overnight
(O/N) |
4.75 |
4.75 |
Source: FMDQ, Zedcrest Research
FX Market
At the Interbank, the Naira/USDrate remained stable
at N306.30/$ (spot) and N360.94/$ (SMIS).At the I&E FX window a total of
$401.69mn was traded in 289 deals, with rates ranging between N358.00/$ -
N365.00/$. The NAFEX closing rate depreciatedby c.0.11% to N363.68/$ from N363.27/$
previously.
At the parallel market, the cashrates depreciated
by 10k to N359.80/$, while the transfer rate remained unchanged at N362.00/$.
FX Market |
||
|
Current (N/$) |
Previous ( N/$) |
CBN
Spot |
306.30 |
306.30 |
CBN
SMIS |
360.94 |
360.94 |
I&E
FX Window |
363.68 |
363.27 |
Cash
Market |
359.80 |
359.70 |
Transfer
Market |
362.00 |
362.00 |
Eurobonds
The NGERIA Sovereignsremained bullish in
today’s session, with yields compressing by c.12bps on average, consequently
capping a c.14bps w/w decline in yields. Interests were more focused on the
shorter end of the curve today, with the most interests seen on the Jan 2021.
The NGERIA Corpsremained slightly bullish,
with the most interests seen on the Zenith 19s and FBNNL 21s.
Related News
1. Average T-Bills Rate Rose 184bps WoW Amidst Buoyant
System Liquidity
2. Bond Yields Moderate
Further Amid Tighter Supply
3. Average T-bills
Yield Rose Significantly by 208bps to Close the Week at 14.43%
4. Markets Take a
Breather as CBN Pauses on OMO
5. Market Players
Selloff Bills above 14% as CBN extends OMO offer to the 1-year
6. Yield Curve Nears
Inversion as DMO Clears 1-Year Bill at 15.60% eff. Yield
7. Market Players Risk
off T-bills, as CBN Elongates OMO Tenor above the 300day Mark
8. Ahead of Next
T-bills Auction Scheduled for 12th Sept, 2018
9. Market Players
Demand Higher Rates for OMO, as PMA Approaches
10. CBN Raises OMO Stop
Rates, Succumbs to Investor Pressure PMA Holds this Wednesday
11. Average T-Bills
Yield Rose by 15bps to Close the Week at 12.36%