T-Bill Yields Tick Higher Ahead of PMA

Proshare

Wednesday, November 14, 2018/ 07.15AM / Zedcrest Capital


***No Money, No Unemployment Data, Nigeria's Head Statistician Says***

KEY INDICATORS

Indicator

Value

Commentary

Inflation

11.28%

As at October 16, 2018, 5bps up from 11.23% recorded in August 2018.

MPR

14.00%

Left Unchanged for the 11th Consecutive Time at the Sept. 25, 2018 MPC Meeting

External Reserves

$41.69bn

As at November 12, 2018. A c.0.10% decrease from $41.73bn on November 9, 2018

Brent Crude

$67.37pb

As at November 13, 2018. A c.5.18% decrease from $71.05pb on November 12, 2018

 

 

Bonds

The bond market traded relatively flat on the day, with yields marginally higher by c.3bps on the day. We witnessed slight interests around the mid tenors following the spike in yields in the previous session.

 

We expect sentiments to remain dampened, as market players remain wary of upward yields pressures ahead of the bond auction next week.

 

Benchmark FGN Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

15.54 13-Feb-20

14.93

14.12

0.09

14.50 15-Jul-21

15.56

15.15

0.14

16.39 27-Jan-22

15.14

14.38

0.02

14.20 14-Mar-24

15.28

15.11

(0.03)

12.50 22-Jan-26

15.69

15.48

0.08

16.29 17-Mar-27

15.69

15.59

(0.06)

13.98 23-Feb-28

16.00

15.84

0.01

12.15 18-Jul-34

16.00

15.79

0.11

12.40 18-Mar-36

15.71

15.51

0.00

16.2499 18-Apr-37

15.59

15.48

(0.05)

Source: Zedcrest Dealing Desk

 

Treasury Bills

The T-bills market was slightly bearish in today’s session, with yields trending higher by c.13bps on average. This was following slight selloff mostly on the Dec – Mar maturities as market players trimmed positions in anticipation of the Primary Market Auction tomorrow.

 

At the PMA tomorrow, we expect yields to clear slightly above their previous levels due to the continued pressure on yields from the frequent OMO auctions by the CBN

 

NTB PMA Expectation  - 14 November 2018

Tenor

Offer (N'bn)

Expected Rate (%)

Previous Rate (%)

91 days

3.38

10.90 - 11.10

10.98

182 days

16.92

13.35 - 13.60

13.49

364 days

107.94

14.35 - 14.60

14.40

Source: Zedcrest Research

 

Benchmark FGN Treasury Bills

Description

Bid (%)

Offer (%)

Day Change (%)

6-Dec-18

12.80

12.25

0.55

3-Jan-19

12.85

12.50

0.05

14-Feb-19

12.80

12.50

0.10

14-Mar-19

13.00

12.60

0.00

4-Apr-19

13.00

12.50

0.00

18-Jul-19

13.00

12.70

0.00

1-Aug-19

13.45

13.15

(0.25)

12-Sep-19

14.50

14.30

0.05

3-Oct-19

14.50

14.30

0.00

Source: Zedcrest Dealing Desk

 

 

Money Market

The OBB and OVN rates remained relatively unchanged from their previous levels, closing today at 5.67% and 6.58%, as system liquidity remained moderately robust at c.N293bn positive.

 

We expect rates to remain relatively unchanged tomorrow as there are no significant outflows expected.

 

Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

5.67

6.08

Overnight (O/N)

6.58

7.00

Source: FMDQ, Zedcrest Research

 

FX Market

At the Interbank, the Naira/USD rate remained unchanged at N306.70/$ (spot) and N360.85/$ (SMIS). At the I&E FX window a total of $147.41mn was traded in 303 deals, with rates ranging between N358.00/$ - N365.00/$. The NAFEX closing rate appreciated slightly by c.0.05% to N363.71/$ from N363.89/$ previously.

 

At the parallel market segment, the cash rate depreciated by 40k to N361.90/$, while the transfer rate remained unchanged at N364.50/$.

 

FX Market

 

Current (N/$)

Previous ( N/$)

CBN Spot

306.70

306.70

CBN SMIS

360.85

360.85

I&E FX Window

363.71

363.89

Cash Market

361.90

361.50

Transfer Market

364.50

364.50

Source: CBN, FMDQ, REXEL BDC

 

 

 

Eurobonds

The NGERIA Sovereigns were softer at the short tenors, but slightly stronger on the longer tenors as market players speculated on the possibility of a non-issuance of a long tenor at the planned FGN Eurobond offering. The 2038s and 2047s consequently gained c.0.35pct on the day, while the rest of the curve was weaker c.0.20pct.

               

In the NGERIA Corps, we witnessed further strengthening on the DIAMBK 19s (+3pct), with slight interests also on the ZENITH and UBANL 22s.

 

 

 Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.


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