The Consumer Price Index (CPI) which measures inflation increased by 16.25% (YoY) in May 2017. This was 0.99 percent points lower than the rate recorded in April (17.24%). On a month-on-month basis, the Headline index increased by 1.88 percent, 0.28 percent points higher than the rate of 1.60% recorded in April 2017.
The Fixed Income market was on a bullish run with significant demand especially on the short end of the market (T-bills). The ab- sence of an OMO auction, coupled with the improvement in mar- ket liquidity supported buying sentiments across all trading T-bills. Yields compressed by about 60bps with a deep rally on short term T-bills maturities (170bps drop) . The FGN bond market also wit- nessed slight buys on the back of the retracement in inflation fig- ures. We expect the bullish sentiments in the T-bills space to per- sist closing the week. Bonds are likely to trade flat as we approach the auction next week.
As expected, Interest rates plummeted today to close at 6% lev- els due to the N205billion OMO maturity credited into the system. The absence of an OMO auction and FX sales by the CBN support- ed the sharp improvement in market liquidity. We expect interest rates to close the week on a calm note, however, the CBN will be poised to mop up excess funds from the system.
| ECONOMIC INDICATORS | |
| Inflation (YoY) | 16.25% |
| Exchange Rate ($) | N305.25 |
| MPR | 14.00% |
| Foreign Reserves | $30.22Bn |
| Brent Crude | $46.83 |
| FGN Bonds | |||||
| Description | Bid (%) | Offer (%) | Day Change (%) | ||
| 16.00 29-Jun-19 | 16.45 | 16.38 | (0.07) | ||
| 15.54 13-Feb-20 | 16.38 | 16.31 | (0.01) | ||
| 14.50 15-Jul-21 | 16.38 | 16.31 | (0.02) | ||
| 16.39 27-Jan-22 | 16.18 | 16.11 | 0.00 | ||
| 14.20 14-Mar-24 | 15.94 | 15.87 | (0.01) | ||
| 12.50 22-Jan-26 | 16.14 | 16.07 | 0.04 | ||
| 12.50 22-Jan-27 | 16.27 | 16.2 | (0.02) | ||
| 12.15 18-Jul-34 | 15.98 | 15.91 | (0.01) | ||
| 12.40 18-Mar-36 | 16.02 | 15.95 | 0.02 | ||
| FGN Treasury Bills | |||||
| Description | Bid (%) | Offer (%) | Day Change (%) | ||
| 3-Aug-17 | 18.40 | 18.15 | (0.60) | ||
| 14-Sep-17 | 14.09 | 13.84 | (3.01) | ||
| 5-Oct-17 | 19.00 | 18.75 | (0.15) | ||
| 2-Nov-17 | 18.85 | 18.6 | (0.05) | ||
| 4-Jan-18 | 18.60 | 18.35 | (0.30) | ||
| 1-Feb-18 | 18.65 | 18.4 | (0.20) | ||
| 1-Mar-18 | 18.50 | 18.25 | 0.00 | ||
| 5-Apr-18 | 18.55 | 18.3 | (0.10) | ||
| 3-May-18 | 18.45 | 18.2 | (0.10) | ||
| Money Market Rates | |||||||
| Current (%) | Previous (%) | ||||||
| Open Buy Back (OBB) | 6.33 | 16.33 | |||||
| Overnight (O/N) | 6.75 | 17.33 | |||||
| FX Market | |||||||
| Current (N/$) | Previous ( N/$) | ||||||
| Interbank | 305.25 | 305.70 | |||||
| CBN SMIS | 320.00 | 320.00 | |||||
| I&E FX Window | 365.07 | 367.17 | |||||
| Parallel Market | 365.00 | 365.00 | |||||
| Primary Market Auction Results | |||||||
| NTB – 14 June 2017 | |||||||
| Tenor | Rate (%) | Offer (N’Bn) | Sub (N’Bn) | Sale (N’Bn) | |||
| 91 days | 13.50 | 39.06 | 39.20 | 39.06 | |||
| 182 days | 17.30 | 23.02 | 24.79 | 23.02 | |||
| 364 days | 18.69 | 174.64 | 201.20 | 174.64 | |||
| FGN Bond Offer– 21 June 2017 | |||||||
| Tenor | Rate (%) | Offer (N’Bn) | Sub (N’Bn) | Sale (N’Bn) | |||
| Jun-21 | TBD | 40.00 | N/A | N/A | |||
| Mar-27 | TBD | 50.00 | N/A | N/A | |||
| Apr-37 | TBD | 50.00 | N/A | N/A | |||
| OMO – 13 June 2017 | |||||||
| Tenor | Rate (%) | Offer (N’Bn) | Sub (N’Bn) | Sale (N’Bn) | |||
| 184 day | 18.00 | 5.00 | 0.32 | 0.32 | |||
| 352 day | 18.60 | 10.00 | 1.80 | 1.80 | |||
| Eurobonds | |||
| Issuer | Description | Yield (%) | Day Change (%) |
| FGN | 6.38 12-Jul-23 | 5.73 | 0.14 |
| FGN | 7.875 16-Feb-32 | 6.95 | 0.08 |
| Fidelity Bank | 6.88 09-May-18 | 12.58 | 0.02 |
| GT Bank | 6.00 08-Nov-18 | 4.32 | 0.00 |
| Zenith Bank | 6.25 22-Apr-19 | 5.38 | 0.02 |
| First Bank | 8.25 07-Aug-20 | 10.65 | 0.05 |
| Access Bank | 7.677 24-Jun-21 | 9.37 | 0.04 |
(FMDQ, CBN, Bloomberg, Zedcrest research)
