Proshare - Facebook Proshare - Twitter Proshare - Google+ Proshare - Linked In Proshare - RSS Feed

Market Players Trade Cautiously as CBN Retains MPR at 14%

Proshare

Tuesday, November 21, 2017 6:18PM/ Zedcrest Capital 

Key Indicators

***CBN Retains Benchmark Interest Rate at 14%***

Inflation

15.91%

Declined by 0.07% in October from 15.98% in September 2017

MPR

14.00%

Left unchanged at 14.00% at the MPC meeting of November 2017

External Reserves

$34.36billion

Accreted by 2.04% as at 16th November from $34.33bn on 15th November 2017

Brent Crude

$62.19/b

Rose by 0.50% from $61.88/b on 16th November 2017

 
Bonds

The bond market traded on a cautious tone, with only few trades focused on the 2021, 2026, 2027 and 2037 bonds. We witnessed continued demand on the 2037 bonds, but with net declines on the 2021 and 2027 bonds, due to slight sell towards the close of market. Average bond yields consequently declined marginally by 2bps to close at 14.60%. We expect cautious trading to persist in the bond space, as market players keenly anticipate results from the bond auction scheduled to hold tomorrow.  

Table 1:Benchmark FGN Bond Yields

Description

Bid (%)

Offer (%)

Day Change (%)

16.00 29-Jun-19

14.59

14.52

(0.03)

15.54 13-Feb-20

14.58

14.51

(0.11)

14.50 15-Jul-21

14.72

14.65

0.06

16.39 27-Jan-22

14.47

14.40

(0.06)

14.20 14-Mar-24

14.67

14.60

(0.01)

12.50 22-Jan-26

14.70

14.63

0.00

16.29 17-Mar-27

14.78

14.71

0.04

12.15 18-Jul-34

14.61

14.54

0.00

12.40 18-Mar-36

14.50

14.43

(0.07)

16.25 18-Apr-37

14.36

14.29

(0.07)

 

 





























Source: Zedcrest Dealing Desk
  

 

Table 2:Bond Auction Expectations

Tenor

Offer (N'bn)

Expected Stop Rate (%)

Jun-21

50.00

14.50 - 14.75

Mar-27

50.00

14.50 - 14.75

 

Treasury Bills
The T-bills market was scantily traded, with slight buys observed on the short to medium end of the curve. Market players bought a total of N18.20bn 198day OMO T-bills offered by the CBN at 17.80%. Average T-bill yields consequently declined by 14bps to 17.84%. We expect the market to be slightly bullish tomorrow, as market players anticipate inflows of c.N200bn from OMO T-bill maturities on Thursday.
 

Table 3:Benchmark Treasury Bills Rates

Description

Bid (%)

Offer (%)

Day Change (%)

7-Dec-17

16.00

15.75

0.00

4-Jan-18

16.90

16.65

(0.45)

1-Feb-18

17.00

16.75

(0.40)

1-Mar-18

16.35

16.10

(0.40)

5-Apr-18

17.15

16.90

(0.05)

3-May-18

17.40

17.15

0.00

14-Jun-18

17.60

17.35

0.20

5-Jul-18

17.50

17.25

(0.10)

2-Aug-18

16.75

16.50

0.00

13-Sep-18

15.00

14.75

0.00

4-Oct-18

15.25

15.00

(0.25)

 Source: Zedcrest Dealing Desk

 

Table 4: OMO  - 21 November 2017

Tenor

Rate (%)

Offer (NBn)

Sub (N'bn)

Sale (N'bn)

 93 day

nil

20.00

nil

nil

198 day

17.80

50.00

18.20

18.20

Source: CBN 


Money Market
The OBB and OVN rates declined to 29.17% and 31.83%, with market liquidity estimated to close at N115bn short from a negative opening figure of N97bn due to debits for today’s OMO. We expect rates to trend between 20% -30% tomorrow, barring any significant OMO T-bill sale by the CBN.
 

Table 5:Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

29.17

38.33

Overnight (O/N)

31.83

41.67

Source: FMDQ, Zedcrest Research 

FX Market
The CBN Official spot rate remained stable at its previous day rate of N305.90/$. Its external reserves is also recorded to have improved by 2.04% to $34.36billion as at 16th of November 2017. Rates at the Investors and exporters FX window appreciated to N359.87/$ from N360.42/$ in the previous session. The parallel market however stayed flat at its previous day rate of N362.00/$. 

Table 6: FX Rates

 

Current (N/$)

Previous ( N/$)

CBN Spot

305.90

305.90

CBN SMIS

330.00

330.00

I&E FX Window

359.87

360.42

Parallel Market

362.00

362.00

Source: CBN, FMDQ, REXEL BDC

For more details email research@zedcrestcapital.com or call the dealing desk via 01-6311667 

Related News

READ MORE:
Related News