NAFEX Rate Hits Five Month High on Lower FPI Inflows

Proshare

Wednesday, July 31, 2019  / 08:52AM / By Zedcrest Capital / Header Image Credit: Money Check


The NAFEX closing rate at the I&E window rose higher by 52k to a five month high of N362.39/$, as the FX market turnover dipped further by 54% to $79m.  


Below are highlights of trading activities in the Fixed Income and FX market today.

 

Bonds

The FGN Bond market traded on a slightly bullish note, with yields lower by c.9bps following renewed client interests on the short to mid end of the curve.

 

We expect yields to remain relatively stable in the near term, due to sustained demand interests from clients.

 

 

Benchmark FGN Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

14.50 15-Jul-21

13.00

12.36

(0.30)

16.39 27-Jan-22

13.12

12.20

0.00

12.75 27-Apr-23

13.43

12.92

0.00

14.20 14-Mar-24

13.44

12.58

(0.15)

13.53 23-Mar-25

13.51

12.84

(0.06)

12.50 22-Jan-26

13.70

13.53

(0.22)

16.29 17-Mar-27

13.77

13.60

(0.12)

13.98 23-Feb-28

13.79

13.57

(0.08)

12.15 18-Jul-34

13.98

13.85

(0.09)

12.40 18-Mar-36

13.99

13.81

(0.04)

16.2499 18-Apr-37

13.84

13.71

(0.02)

14.80 26-Apr-49

14.07

13.99

0.02


Source: Zedcrest Dealing Desk
 

 

 

 

Treasury Bills

The T-bills market was only slightly bullish, with yields marginally lower by c.4bps, despite the boost in system liquidity from FAAC inflows in the previous session. Yields compressed the most on the long end of the curve (June/July), due to the paucity of offers on those tenors.

 

The CBN would offer a total of c.N209bn T-bills, to rollover maturing NTBs in tomorrow’s session. In tune with the recent decline in the NTB curve, we expect yields to clear slightly lower from their previous auction levels.

 

NTB  - Auction Expectation

Tenor

Offer (N'bn)

Expected Rate (%)

Previous Rate (%)

91 days

24.37

9.60 - 9.90

9.74

182 days

38.75

10.40 - 10.70

10.75

364 days

145.48

10.80 - 11.10

11.14


 

Benchmark Treasury Bills

Description

Bid (%)

Offer (%)

Day Change (%)

12-Sep-19

11.00

10.00

0.10

3-Oct-19

11.00

10.25

0.10

14-Nov-19

11.00

10.00

0.00

5-Dec-19

10.90

10.65

0.10

2-Jan-20

11.00

10.90

(0.10)

6-Feb-20

11.10

10.75

(0.05)

19-Mar-20

11.10

10.50

(0.05)

2-Apr-20

11.10

10.75

(0.05)

14-May-20

11.00

10.65

(0.10)

04-Jun-20

10.85

10.40

(0.35)

Source: Zedcrest Dealing Desk 

 

 

Money Market

Rates in the money declined further by c.9pct as inflows from FAAC payments boosted system liquidity to c.290bn positive. The OBB and OVN rates consequently ended the session at 4.57% and 5.21% respectively.

 

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

 

Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

4.57

13.14

Overnight (O/N)

5.21

14.29

Source: FMDQ, Zedcrest

 

 

 

 

FX Market

At the interbank, the Naira/USD rate remained stable at N306.85/$ (spot) and N357.68/$ (SMIS). The NAFEX closing rate at the I&E window rose higher by 52k to a five month high of N362.39/$, as market turnover dipped further by 54% to $79m. At the parallel market, the cash and transfer rates remained stable at N357.50/$ and N362.00/$ respectively.

 

FX Market

 

Current (N/$)

Previous ( N/$)

CBN Spot

306.85

306.85

CBN SMIS

357.68

357.68

I&E FX Window

362.39

361.87

Cash Market

357.50

357.50

Transfer Market

362.00

362.00

Source: CBN, FMDQ, REXEL BDC

 

 

Eurobonds

The NGERIA Sovereigns remained slightly bearish, with yields lower by c.6bps on the day.

 

The NGERIA Corps remained relatively stable, but with offers slightly improved on the day.


 

Proshare Nigeria Pvt. Ltd.

 

 

Proshare Nigeria Pvt. Ltd.

 

 

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Proshare Nigeria Pvt. Ltd.


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