Bonds & Fixed Income | |
Bonds & Fixed Income | |
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Monday, March 25, 2019 07:15 PM / Zedcrest Capital
***Buhari
Receives Presidential Committee Report on National Minimum Wage***
KEY
INDICATORS
Indicator |
Value |
Commentary |
Inflation |
11.31% |
As at March 15, 2019. A c.6bps decline
from 11.37% recorded in January 2019 |
MPR |
14.00% |
Left Unchanged for the 15th
Consecutive Time at the Jan. 22, 2019 MPC Meeting |
External Reserves |
$43.51bn |
As at March 20, 2019. A c.0.23% increase
from $43.41bn on March 19, 2019 |
Brent Crude |
$66.86pb |
As at March 25, 2019. A c.0.21% increase from $66.72pb
on March 22, 2019 |
Bonds
The
FGN Bond market remained relatively flat, except for slight demand on some
short tenors following coupon payments on the FGN 2024 Sukkuk and FGN 2025
Bonds. Yields were however slightly higher by c.2bps on the day.
We
expect demand interests to remain relatively muted ahead of the FGN bond
auction scheduled to hold on Wednesday with N100bn of the 5, 7 and 10-yr bonds to
be offered by the DMO.
Benchmark FGN Bonds |
|||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
14.50 15-Jul-21 |
14.57 |
14.31 |
(0.16) |
16.39 27-Jan-22 |
14.53 |
14.25 |
0.22 |
12.75 27-Apr-23 |
14.68 |
14.40 |
0.07 |
14.20 14-Mar-24 |
14.50 |
14.27 |
0.02 |
13.53 23-Mar-25 |
14.55 |
14.37 |
0.10 |
12.50 22-Jan-26 |
14.50 |
14.33 |
(0.09) |
16.29 17-Mar-27 |
14.48 |
14.28 |
(0.04) |
13.98 23-Feb-28 |
14.33 |
14.27 |
0.03 |
12.15 18-Jul-34 |
14.39 |
14.30 |
(0.02) |
12.40 18-Mar-36 |
14.32 |
14.13 |
0.01 |
16.2499 18-Apr-37 |
14.27 |
14.12 |
0.04 |
Source: Zedcrest Dealing Desk
Treasury Bills
The T-bills market
We expect demand interests for T-bills to remain
relatively constrained by the tight system liqudity levels which could push
yields slightly higher. The CBN is also expected to keep yields elevated via
renewed OMO auctions to mop up expected liquidty inflows from FAAC and OMO
maturiities later in the week.
Benchmark Treasury Bills |
|||
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
4-Apr-19 |
12.00 |
10.00 |
0.00 |
2-May-19 |
11.00 |
9.00 |
0.00 |
13-Jun-19 |
12.00 |
11.40 |
0.00 |
18-Jul-19 |
12.50 |
12.00 |
0.00 |
1-Aug-19 |
13.00 |
11.85 |
0.15 |
12-Sep-19 |
13.35 |
13.10 |
0.05 |
3-Oct-19 |
13.20 |
13.05 |
(0.05) |
14-Nov-19 |
13.25 |
13.05 |
0.00 |
5-Dec-19 |
13.05 |
13.00 |
(0.20) |
2-Jan-20 |
13.15 |
13.05 |
0.00 |
6-Feb-20 |
13.05 |
12.90 |
(0.05) |
Source: Zedcrest Dealing Desk
Money Market
Rates
in the money market trended significantly higher by c.10pct as market players
funded for a wholesale FX auction ($210m) by the CBN. This further compressed
system liquidity which opened the session at c.N35bn positive. The OBB and OVN
rates consequently ended the session at 22.43% and 24.43% respectively.
We
expect rates to moderate slightly tomorrow, as market players would be able to
fund deficits from the CBN’s SLF tomorrow.
Money
Market Rates |
||
|
Current
(%) |
Previous
(%) |
Open
Buy Back (OBB) |
22.43 |
14.25 |
Overnight
(O/N) |
24.43 |
14.83 |
Source: FMDQ, Zedcrest Research
FX Market
At the Interbank, the Naira/USD rate weakened
by 0.02% to N306.95/$ in the Spot market, while the SMIS rate was unchanged at N355.78/$.
The NAFEX closing rate in the I&E window appreciated marginally by 0.01% to
N360.39/$. At the parallel market, the cash rate appreciated by 0.03% to
N357.90/$, while the transfer rate remained unchanged N364.00/$.
FX
Market |
||
|
Current
(N/$) |
Previous
( N/$) |
CBN
Spot |
306.95 |
306.90 |
CBN
SMIS |
355.78 |
355.78 |
I&E
FX Window |
360.39 |
360.43 |
Cash
Market |
357.90 |
358.00 |
Transfer
Market |
364.00 |
364.00 |
Source: CBN, FMDQ, REXEL BDC
Eurobonds
The NGERIA Sovereigns declined further in today’s session as global
growth fears persisted across markets. The NGERIA curve was consequently higher
by c.15bps on the day, with the heaviest losses witnessed in the belly of the
curve.
Investors were also slightly
bearish on the NGERIA Corps, with
yields mostly higher on the ECOTRA, ACCESS and FBNNL 21s.
Related News
1.
Average Money
Market Rate Rose By 3.12% To Settle At 14.54%
2.
Weak German Data, UST Curve Inversion Weigh on EM Risk
Assets
3.
I and E Turnover Rebounds to c.$700m as CBN Re-Issues Long
Tenor OMO Bill
4.
Invest in FGN Monthly Bond Auction – March 2019
5.
PMA Stop Rates Clear c.40bps lower following c.530%
Oversubscription
6.
Access Bank Plc Holds Signing Ceremony for N15 Billion
Green Bond Issuance
7.
T-Bill Rates to Clear Lower at Tomorrow’s NTB Auction
8.
NAFEX Rate Weakens as Turnover Dips to c.$100m
9.
Money Market
Rate Increased As Overnight Rate Rose To 11.67%
10. Bond Market Trades Flat, Despite Inflation Dip
11. CBN Delivers Further Cut to Stop Rate in c.N400bn OMO Sale