Markets close on a Calm note as Locals Remain Net Buyers of Bonds

Proshare

Friday, August 24, 2018 /06:24PM / Zedcrest Capital

***Nigeria’s Q2 2018 GDP report to be released on Monday***

KEY INDICATORS

Indicator

Value

Commentary

Inflation

11.14%

As at August15, 2018,9bps down from 11.23% recorded in June 2018.

MPR

14.00%

Next MPC meeting scheduled for September 24 & 25, 2018

External Reserves

$46.25bn

As atAugust 20, 2018. A c.0.26% decrease from 46.37% on August 17 2018

Brent Crude

$76.53pb

As at August 24, 2018. A c.1.99% increaseDoD, from$75.04pb (August 23, 2018)

 

 

Bonds

The Bond market closed the week on a relatively flat note, with a relatively strong start to the trading session, dampened by some late selloff, mostly on the 2036s. Yields consequently compressed marginally by c.1bp on average.

 

In the coming week, we expect the market to remain largely order driven, with some client demand expected to come in to take advantage of the relatively higher yields on the mid to long end of the curve.

 

Secondary Market Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

15.54 13-Feb-20

13.85

13.46

0.00

14.50 15-Jul-21

14.37

14.00

0.11

16.39 27-Jan-22

14.26

13.83

(0.02)

14.20 14-Mar-24

14.58

14.36

(0.15)

12.50 22-Jan-26

14.95

14.89

(0.05)

16.29 17-Mar-27

14.93

14.87

(0.01)

13.98 23-Feb-28

14.89

14.84

(0.01)

12.15 18-Jul-34

14.95

13.82

(0.01)

12.40 18-Mar-36

15.04

14.96

0.09

16.2499 18-Apr-37

14.91

14.85

(0.05)

Source: Zedcrest Dealing Desk


Treasury Bills

The T-bills market remained relatively stable, with slight demand seenon some of the short and mid-tenured bills, due to the relatively buoyant level of liquidity in the system. Yields however inched slightly higher by c.5bps, as market players demanded higher yields from willing sellers.

In the coming week, we do not expect this trend to change, as demand for T-bills remain relatively week, despite the persistently robust system liquidity levels.

Secondary Market Treasury Bills 

Description

Bid (%)

Offer (%)

Day Change (%)

13-Sep-18

11.60

11.15

0.10

4-Oct-18

11.50

10.10

0.25

1-Nov-18

11.70

11.35

(0.30)

6-Dec-18

12.10

11.90

(0.10)

3-Jan-19

12.30

12.10

(0.10)

14-Feb-19

12.30

12.10

(0.10)

14-Mar-19

12.20

12.05

(0.10)

4-Apr-19

12.20

11.70

0.00

18-Jul-19

12.25

11.45

0.20

Source: Zedcrest Dealing Desk

 

Money Market

The OBB and OVN ratesremained relatively stable, closing today at 6.75% and 7.92% respectively. System Liquidity was however published to have declined to c.N360bn positive based on CBN’s official figures.

 

In the coming week, we expect rates to remain moderated, with inflows from FAAC and OMO maturities expected to support outflows for the regular CBN OMO and FX auction sales.

 

Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

6.75

6.83

Overnight (O/N)

7.92

7.75

Source: FMDQ, Zedcrest Research

 

FX Market

The Naira/USD rate remained unchanged at the interbank,closing at N306.10/$. At the I&E FX window, a total of $601.64mn was traded in 340 deals, with rates ranging between N359.00/$ - N364.00/$. The NAFEX rate appreciated by 0.07% to close at N362.35/$.

At the parallel market, the cash and transfer rates remained unchanged to close at N359.30/$ and N362.00/$ respectively.

FX Market

 

Current (N/$)

Previous ( N/$)

CBN Spot

306.10

306.10

CBN SMIS

352.00

352.00

I&E FX Window

362.35

362.60

Cash Market

359.30

359.30

Transfer Market

362.00

362.00

Source: CBN, FMDQ, REXEL BDC

 

Eurobonds

The NGERIA Sovereigns remained slightly bullish, with yields compressing by c.8bps across the curve, capping a c.27bps W/W decline in yields. The most interest were seen on the Nov 2027s which compressed by c.8bps (+0.40pct).

 

The NGERIA Corps were muted, with no significant trades witnessed except for slight interests seen on the FIDBAN 22s and SEPLLN 23s.

 

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

 

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