Monday, April 30, 2018 /8:15 PM/Zedcrest Capital
*** Nigeria, GE sign agreement on rail concession***
The Bond Market opened the week on a very quiet note, with yields inching slightly higher by c.1bp on average, as most traders stayed on the sidelines whilst we witnessed very little in the way of client flows. We expect the market to be relatively stable at these levels in the near term, whilst noting the need to critically monitor the trend of OMO issuances by the CBN.
The T-bills market remained slightly bullish, with yields compressing by c.20bps, mostly on the Sep—Nov maturities. The CBN did not conduct an OMO auction, hence the market remained awash with Liquidity, consequently spurring some of the buys witnessed on the short and medium tenured maturities. We expect this trend to be sustained in the build up to another OMO auction by the CBN on Thursday, when we have c.N187bn in maturing OMO bills. There will also be an NTB Auction on Wednesday, with a total of c.N95bn of the 91-, 182– and 364-day bills on offer.
The OBB and OVN rates declined slightly to 1.92% and 2.42%, as system liquidity remained firmly positive at c.N400bn positive. We expect rates to be relatively stable due to the buoyant level of liquidity in the system.
The Interbank rate depreciated by 0.02% to N305.75/$. This was despite the CBN’s intervention in the market to the tune of $210m for wholesale purchases, SME and invisible transactions. The NAFEX rate also depreciated by 0.03% to N360.51/$, while the total volume traded rose significantly higher by 112% to $362m. Rates in the Unofficial market however remained stable at N361.50/$.
The NGERIA Sovereigns remained weak in today’s session with investors still selling off across the curve. We witnessed the most sell on the 2032s and 2047s which lost –0.25pt on average.
The NGERIA Corps were slightly bearish across most tickers, except for the FBNNL 21s which gained +0.75pt. The SEPLLN 23s was also slightly bullish having traded at 101.90 and consequently lifted to 101.50/102.25.