T-Bills Ease up Bullish Run as CBN Sells c.N410bn OMO Bills

Proshare

Thursday, January 24, 2018/ 04:50PM / Zedcrest Capital

***OPEC focused on averting new oil glut before April meeting *** - Barkindo

KEY INDICATORS

Indicator

Value

Commentary

Inflation

11.44%

As at January 16, 2019. A c.16bps increase from 11.28% recorded in November 2018

MPR

14.00%

Left Unchanged for the 13th Consecutive Time at the Jan. 22, 2019 MPC Meeting

External Reserves

$43.12bn

As at January 22, 2019. A c.0.01% decrease from $43.13bn on January 21, 2019

Brent Crude

$60.67pb

As at January 24, 2019. A c.0.00% decrease from $60.69pb on January 23, 2018

 

Bonds

The Bond market traded on a slightly bearish note, with yields ticking higher by c.3bps on average, as market players reacted to release of the Q1 FGN bond calendar. Offer yields also improved significantly especially on the 37s (+29bps) and 28s (+18bps). We however witnessed demand interests on the 2024s, which compressed the yield on the bond by c.12bps on the day.

 

We expect the market to remain slightly bearish, as market players’ position for renewed supply of bonds at the forthcoming auction.

 

Benchmark FGN Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

15.54 13-Feb-20

15.52

14.87

0.01

14.50 15-Jul-21

15.60

15.19

0.10

16.39 27-Jan-22

15.11

14.80

0.08

14.20 14-Mar-24

15.00

14.89

(0.12)

12.50 22-Jan-26

15.32

15.17

(0.01)

16.29 17-Mar-27

15.29

15.09

0.07

13.98 23-Feb-28

15.48

15.40

0.06

12.15 18-Jul-34

15.40

15.15

0.01

12.40 18-Mar-36

15.28

15.17

0.07

16.2499 18-Apr-37

15.33

15.26

0.07

Source: Zedcrest Dealing Desk

 

Treasury Bills

The T-bills market eased up from its recent bullish trend in today’s session, with yields ticking higher by c.5bps, as market players reacted to the significant OMO sale (c.N410bn) by the CBN.

We expect yields to close the week on a relatively calm note, on the back of the relatively stable system liquidity levels. A further OMO sale by the CBN tomorrow may however pressure yields slightly higher.

Treasury Bills

Description

Bid (%)

Offer (%)

Day Change (%)

14-Feb-19

13.05

12.50

0.05

14-Mar-19

13.05

11.00

0.10

4-Apr-19

13.05

12.50

0.05

2-May-19

12.20

12.00

(0.05)

13-Jun-19

13.00

12.60

0.00

18-Jul-19

13.50

12.90

0.10

1-Aug-19

13.70

13.25

0.05

12-Sep-19

14.45

14.20

0.00

3-Oct-19

14.80

14.50

0.05

14-Nov-19

14.90

14.70

0.00

5-Dec-19

14.95

14.75

0.00

Source: Zedcrest Dealing Desk

 

Money Market

Rates in the money market moderated further by c.3pct, as the significant OMO by the CBN was moderated by the c.N380bn OMO maturities, with system liquidity currently estimated at c.N40bn from c.N70bn opening the day. The OBB and OVN rates consequently ended the session at 12.33% and 13.00% respectively.

We expect funding rates to close the week at current levels as there are no significant inflows expected tomorrow.

Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

12.33

15.00

Overnight (O/N)

13.00

15.67

Source: FMDQ, Zedcrest Research

 

 

FX Market

At the Interbank, the Naira/USD rate remained unchanged at N306.80/$ (spot) and N357.97/$ (SMIS). The NAFEX rate in the I&E window appreciated marginally by c.0.04% to N362.43/$. Cash and transfer rates in the parallel market however depreciated further by c.0.33% and c.0.14% to N363.00/$ and N366.00/$ respectively.

 

FX Market

 

Current (N/$)

Previous ( N/$)

CBN Spot

306.80

306.80

CBN SMIS

357.97

357.97

I&E FX Window

362.43

362.58

Cash Market

363.00

361.80

Transfer Market

366.00

365.50

Source: CBN, FMDQ, REXEL BDC

 

 

Eurobonds

The NGERIA Sovereigns maintained its recent bullish run, with yields compressing further by c.10bps on average. The most interests were seen on the 2032 bond which compressed by c.17bps on the day.

 

The NGERIA Corps were relatively quiet, with bids weaker on the DIAMBK 19s and demand still firm on the SEPLLN 23s. We also witnessed slight interest on the ACCESS 21s Sub.



Proshare Nigeria Pvt. Ltd.


 

Proshare Nigeria Pvt. Ltd.

 

 

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Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.

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