Bullish Sentiments Wane, Following Release of Q4 FGN Bond Calendar

Proshare

Monday, October 08, 2018 / 06:55PM / Zedcrest Capital


***Report on New Minimum Wage Ready*** - NLC

KEY INDICATORS

Indicator

Value

Commentary

Inflation

11.23%

As at September14, 2018,9bps up from 11.14% recorded in July 2018.

MPR

14.00%

Left Unchanged for the 11th Consecutive Time at the Sept. 25, 2018 MPC Meeting

External Reserves

$43.84bn

As atOctober5, 2018. A c.0.18% decrease from $43.92bnon October4, 2018

Brent Crude

$82.97pb

As at October 8, 2018. A c.2.01% decreasefrom$84.67pbon October 5, 2018

 

 

Bonds

The bond market gave up recent gains in today’s session, with yields rising by c.15bps, as market players reacted to the release of the Q4 FGN bond Calendar, which contained slightly more volumes on offer than in the previous quarter. Market players were mostly bearish on the 2028s and 2034s while other maturities remained scantily traded.

 

We expect this trend to persist, even as we anticipate a further uptick in the inflation results for the month of September. 

 


Benchmark FGN Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

15.54 13-Feb-20

13.93

13.64

0.16

14.50 15-Jul-21

14.97

14.56

0.23

16.39 27-Jan-22

14.50

13.69

0.47

14.20 14-Mar-24

15.02

14.86

0.07

12.50 22-Jan-26

14.86

14.71

0.06

16.29 17-Mar-27

15.15

14.98

0.09

13.98 23-Feb-28

15.21

15.13

0.11

12.15 18-Jul-34

15.25

15.12

0.08

12.40 18-Mar-36

15.20

15.01

0.11

16.2499 18-Apr-37

15.11

14.92

0.09

Source: Zedcrest Dealing Desk 

 

Treasury Bills

The T-bills market traded on a realtively calm note as system liqudity got bolstered by inflows from paris club credits (c.N175bn) by the CBN. Yields consequently declined marginally by c.5bps, with slight buying interests observed on 10-Jan and 28-Mar, whilst other maturities traded relatively flat on the day.

 

We expect the market to remain relatively calm in the near term, as appetite for the CBN’s weekly OMO auctions continues to dominate sentiments in the market ahead of the OMO maturity (c.N227bn) on Thursday. 

 


Benchmark FGN Treasury Bills

Description

Bid (%)

Offer (%)

Day Change (%)

1-Nov-18

13.00

12.75

0.00

6-Dec-18

13.00

12.75

0.00

3-Jan-19

12.75

12.30

0.00

14-Feb-19

12.90

12.50

0.00

14-Mar-19

12.70

12.25

0.00

4-Apr-19

12.50

12.20

0.00

18-Jul-19

13.00

12.45

0.00

1-Aug-19

13.00

12.50

0.00

12-Sep-19

13.25

12.75

0.00

Source: Zedcrest Dealing Desk 

 

 

Money Market

The OBB and OVN rates crashed by c.12pct to 9.50% and 10.58% respectively, as inflows from Paris Club credits bolstered system liquidity to c.N250bn positive.

 

We expect rates to remain relatively stable, as there are no significant outflows expected tomorrow.

 

Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

9.50

20.86

Overnight (O/N)

10.58

22.50

Source: FMDQ, Zedcrest Research 

 

 

FX Market

At the Interbank, the Naira/USD Spot rate depreciated marginally by c.0.02% to N306.40/$ (spot), while the SMIS rate remained unchanged at N361.34/$. At the I&E FX window a total of $128.04mn was traded in 273 deals, with rates ranging between N351.00/$ - N365.30/$. The NAFEX closing rate depreciated further by c.0.22% to another record high of N364.61/$ from N363.82/$ previously.

 

At the parallel market, the cash rate and transfer rates depreciated by 20k each to N359.70/$ and N363.00/$ respectively.

 

FX Market

 

Current (N/$)

Previous ( N/$)

CBN Spot

306.45

306.40

CBN SMIS

361.34

361.34

I&E FX Window

364.61

363.82

Cash Market

359.70

359.50

Transfer Market

363.00

362.80

Source: CBN, FMDQ, REXEL BDC 

 

 

Eurobonds

The NGERIA sovereigns maintained their recent bearish trend, with yields inching slightly higher by c.4bps on average.

                                                                                            

The NGERIA Corps were mostly quiet, with no significant trading activities observed.

 


 Proshare Nigeria Pvt. Ltd.

 

 

Proshare Nigeria Pvt. Ltd.


 

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