T-bills Market Trades Flat, as CBN Mops up c.N249bn in OMO Sale

Proshare

Thursday, October 11, 2018 / 07:19PM / Zedcrest Capital


***Senate, Reps assure Buhari on passage of $2.7bn Eurobond request***

KEY INDICATORS

Indicator

Value

Commentary

Inflation

11.23%

As at September14, 2018,9bps up from 11.14% recorded in July 2018.

MPR

14.00%

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

External Reserves

$43.43bn

As atOctober10, 2018. A c.0.21% decrease from $43.52bnon October9, 2018

Brent Crude

$81.31pb

As at October 11, 2018. A c.2.49% decreasefrom$83.39pbon October 10, 2018

 

 

Bonds

The bond market traded on a relatively flat note, with only slight interests seen on the 21s and 27s. Yields consequently compressed by c.6bps on average as investors continued to show preference for the short tenors.

 

We expect the market to close the week on a relatively calm note, as market players look onward towards the inflation data to be released in the coming week, with consensus expectation being for a further uptick in the headline rate. 


Benchmark FGN Bonds

Description

Bid (%)

Offer (%)

Day Change (%)

15.54 13-Feb-20

13.92

13.50

(0.05)

14.50 15-Jul-21

14.81

14.58

(0.12)

16.39 27-Jan-22

14.10

13.72

(0.30)

14.20 14-Mar-24

14.99

14.82

(0.02)

12.50 22-Jan-26

14.84

14.77

0.01

16.29 17-Mar-27

15.05

14.97

(0.10)

13.98 23-Feb-28

15.18

15.15

(0.03)

12.15 18-Jul-34

15.21

15.14

0.01

12.40 18-Mar-36

15.20

15.05

0.00

16.2499 18-Apr-37

15.11

14.99

0.00

Source: Zedcrest Dealing Desk 

 

 

Treasury Bills

The T-bills market was scantily traded in today’s session, with slight selloff seen on the shorter end of the curve (Oct – Feb), as market players repositioned for the OMO auctioned announced by the CBN.

 

The CBN offered a total of N300bn of the 91-, 182- and 350-day bills to mop up inflows worth c.N277bn in maturing bills. It was however only able to sell a total of c.N249bn of the 182- and 350-day bills, with rates maintaiuned at at 12.50% and 13.50% respectively. There was no sale on the 91-day tenor.

 

We expect the market to close the week on a slightly bearish note, due to expected outflows for a retail FX auction by the CBN tomorrow.

 


Benchmark FGN Treasury Bills

Description

Bid (%)

Offer (%)

Day Change (%)

1-Nov-18

13.15

12.90

0.15

6-Dec-18

13.00

12.75

0.25

3-Jan-19

13.00

12.10

0.60

14-Feb-19

12.90

12.60

0.05

14-Mar-19

13.00

12.30

0.00

4-Apr-19

12.35

12.05

0.00

18-Jul-19

13.10

12.50

(0.05)

1-Aug-19

13.00

12.75

(0.20)

12-Sep-19

13.30

13.00

0.05

Source: Zedcrest Dealing Desk 

 

 

Money Market

The OBB and OVN rates remained relatively stable, closing today at 9.00% and 9.58% respectively, as system liquidity remained supported by inflows from OMO maturities and retail FX refunds. Our estimate for system liquidity is at c.N350bn closing today, having taken into account the outflows for today’s OMO auction.

 

We expect rates to spike above single digits tomorrow, due to expected outflows for a retail FX auction by the CBN.

 

Money Market Rates

 

Current (%)

Previous (%)

Open Buy Back (OBB)

9.00

9.67

Overnight (O/N)

9.58

10.17

Source: FMDQ, Zedcrest Research 

 

 

FX Market

At the Interbank, the Naira/USD rate remained stable at N306.45/$ (spot) and N361.34/$ (SMIS). At the I&E FX window a total of $135.47mn was traded in 399 deals, with rates ranging between N358.00/$ - N365.00/$. The NAFEX closing rate appreciated by 0.07% toN364.02/$ from N364.27/$ previously.

 

At the parallel market, the cash and transfer rates remained unchanged at N360.00/$ and N363.00/$ respectively.

 

FX Market

 

Current (N/$)

Previous ( N/$)

CBN Spot

306.45

306.45

CBN SMIS

361.34

361.34

I&E FX Window

364.02

364.27

Cash Market

360.00

360.00

Transfer Market

363.00

363.00

Source: CBN, FMDQ, REXEL BDC 

 

 

Eurobonds

The NGERIA sovereigns remained bearish in today’s session, with yields rising further by c.7bps on average. We witnessed the most sell off on the 2030s which lost c.0.60pct on the day. Yields are now up c.25bps from their levels at the start of the week.

                                                                                            

The NGERIA Corps were mostly quiet, except for continued interests on the DIAMBK 19s, -20bps d/d.



 

 Proshare Nigeria Pvt. Ltd.



Proshare Nigeria Pvt. Ltd.

 

Related News

 

1.       Yields Compress Marginally, with Interests on the Short Tenors

2.       Eterna Plc Proposes Issuance of N10bn 270 Day Commercial Paper

3.       FGN Eurobond Yields Trend Higher as Presidency Seeks Approval for New Issue

4.       Flour Mills of Nigeria Plc Bond Issuance Closes Today

5.       C and I Leasing Lists N7bn Fixed Rate Bond on FMDQ Platform

6.       Bullish Sentiments Wane, Following Release of Q4 FGN Bond Calendar

7.       Wema Funding SPV Series II Bond Issuance Closes Today

READ MORE:
Related News
SCROLL TO TOP