One Year T-bill to Clear Significantly Lower at PMA Tomorrow

Proshare

Monday, March 11, 2019 06:39 PM / Zedcrest Capital

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KEY INDICATORS

Indicator

Value

Commentary

Inflation

11.37%

As at February 15, 2019. A c.7bps decline from 11.44% recorded in December 2018

MPR

14.00%

Left Unchanged for the 15th Consecutive Time at the Jan. 22, 2019 MPC Meeting

External Reserves

$42.66bn

As at March 8, 2019. A c.0.12% increase from $42.61bn on March 7, 2019

Brent Crude

$67.14pb

As at March 12, 2019. A c.0.93% increase from $66.52pb on March 11, 2019

 

Bonds

The FGN Bond Market remained scantily traded, with yields trending further higher by c.4bps as demand interests remained relatively weak across the curve.

 

The recent pullback in bond yields have been mostly due to the slowdown in FPI interests, even as local fixed income investors have maintained preference for the Fed Govt T-bills. Barring renewed interests from FPIs, we expect the bond market to remain relatively weak in the near term.

 


Benchmark FGN Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

14.50 15-Jul-21

14.71

14.34

0.00

16.39 27-Jan-22

14.65

14.34

0.04

12.75 27-Apr-23

14.66

14.44

(0.05)

14.20 14-Mar-24

14.46

13.97

0.00

13.53 23-Mar-25

14.59

14.31

0.04

12.50 22-Jan-26

14.44

14.32

0.02

16.29 17-Mar-27

14.53

14.36

0.12

13.98 23-Feb-28

14.33

14.25

0.05

12.15 18-Jul-34

14.39

14.12

0.06

12.40 18-Mar-36

14.43

14.25

0.11

16.2499 18-Apr-37

14.34

14.23

0.04

Source: Zedcrest Dealing Desk

 

 

Treasury Bills

The T-bills market traded on a relatively calm note, with better offers on the short and mid end of the curve as against the relatively stronger bids seen on the longer end of the curve.

The CBN on behalf of the FGN would offer c.N90bn T-bills at a Primary Market Auction scheduled to hold tomorrow. Given the recent stop in the one year OMO offering by the CBN, we expect demand to be heavily skewed to the 364-day bill with stop rates on the tenor expected to clear at c.150bps below the level at the previous NTB auction. Stop rates on the 91 and 182 day bills are however expected to be relatively unchanged from previous levels.

NTB Auction Expectation

Tenor

Offer (N'bn)

Expected Rate (%)

Previous Rate (%)

91 days

5.00

10.75 - 11.05

10.90

182 days

14.00

12.90 - 13.20

13.01

364 days

70.50

12.65 - 12.95

14.37

Source: Zedcrest Research

 


Benchmark Treasury Bills

Description

Bid (%)

Offer (%)

Day Change (%)

4-Apr-19

12.50

10.00

1.50

2-May-19

12.00

10.00

1.00

13-Jun-19

11.90

11.40

0.40

18-Jul-19

13.00

11.90

1.10

1-Aug-19

13.00

12.10

0.50

12-Sep-19

13.40

13.25

0.40

3-Oct-19

13.55

13.35

0.15

14-Nov-19

13.55

13.35

0.05

5-Dec-19

13.50

13.25

(0.15)

2-Jan-20

13.40

13.00

(0.10)

6-Feb-20

13.30

12.90

(0.05)

Source: Zedcrest Dealing Desk

 

 

Money Market

Rates in the money market remained relatively stable with the OBB and OVN rates closing the session slightly lower at 9.67% and 10.33% respectively. This was as system liquidity improved to c.N180bn positive, in absence of an OMO auction by the CBN.

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

Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

9.67

10.83

Overnight (O/N)

10.33

11.58

Source: FMDQ, Zedcrest Research

 

 

FX Market

At the Interbank, the Naira/USD rate remained unchanged at N306.95/$ (Spot) and N356.92/$ (SMIS). The NAFEX closing rate in the I&E window however weakened slightly by 0.06% to N360.44/$, while the cash rate and transfer rates at the parallel market remained unchanged at N358.00/$ and N365.00/$ respectively.

 

FX Market

 

Current (N/$)

Previous ( N/$)

CBN Spot

306.95

306.95

CBN SMIS

356.92

356.92

I&E FX Window

360.44

360.23

Cash Market

358.00

358.00

Transfer Market

365.00

365.00

Source: CBN, FMDQ, REXEL BDC

 

 

 

Eurobonds

The NGERIA Sovereigns remained bullish as oil prices sustained gains, now above $67pb. Yields were consequently lower by c.9bps on average, with the most demand still witnessed on the 2032s.

 

Activities remained relatively muted in the NGERIA Corps, with slight demand witnessed on the DIAMBK 19s, UBANL 22s and SEPLLN 23s.



Proshare Nigeria Pvt. Ltd.


 

Proshare Nigeria Pvt. Ltd.


 

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