In its latest move to further rein inflation, the Central Bank of Nigeria (CBN) mopped up a total of N200.32 billion from the Nigerian banking system through a special Open Market Operation (OMO) announced on Thursday at the rate of 16 percent per an- num. It also conducted another OMO today with a total sale of about N87bn at 18.00 – 18.60 percent as shown in our report.
ECONOMIC INDICATORS | |
Inflation (YoY) | 16.25% |
Exchange Rate ($) | N305.75 |
MPR | 14.00% |
Foreign Reserves | $30.21Bn |
Brent Crude | $47.24 |
The Fixed Income market opened today with the bulls dominating the early trades. The CBN had stated its intention to issue stabilization securi- ties (T-bills) of 182days tenor at 16.00% to manage excess liquidity in the system. This news supported a bullish trend as market playes went on a buying spree as it seemed the high interest rate era was coming to an end. However, upon the announcement of OMO results with the CBN maintaining stop rates at 18.00% and 18.60%, we saw a sharp reversal in market mood with aggressive sell-off across the entire Fixed income spec- trum. Yields trended down by an average of 40bps on T-bills and 8bps on bonds. We anticipate a mixed trading session next week as market play- ers try to weigh in the interest rate intent of the apex bank.
The aggregate sale of N286billion in OMO T-bills by the CBN resulted in a sharp increase in interest rates today. OBB and O/N rates closed at 15.00% levels, coming from 6.00%. The CBN has continued to adopt differ- ent strategies to manage excess liquidity in the system to consolidate on the gains of a stable exchange rate and slowdown in inflationary pres- sures. We expect interest rates to trend northwards next week as CBN continues its FX interventions and OMO auctions.
FGN Bonds | |||||||
Description | Bid (%) | Offer (%) | Day Change (%) | ||||
16.00 29-Jun-19 | 16.48 | 16.41 | 0.03 | ||||
15.54 13-Feb-20 | 16.36 | 16.29 | (0.02) | ||||
14.50 15-Jul-21 | 16.30 | 16.23 | (0.08) | ||||
16.39 27-Jan-22 | 16.16 | 16.09 | (0.02) | ||||
14.20 14-Mar-24 | 15.90 | 15.83 | (0.04) | ||||
12.50 22-Jan-26 | 16.05 | 15.98 | (0.09) | ||||
12.50 22-Jan-27 | 16.17 | 16.10 | (0.10) | ||||
12.15 18-Jul-34 | 15.95 | 15.88 | (0.03) | ||||
12.40 18-Mar-36 | 15.99 | 15.92 | (0.03) | ||||
FGN Treasury Bills | |||||||
Description | Bid (%) | Offer (%) | Day Change (%) | ||||
3-Aug-17 | 18.40 | 18.15 | 0.00 | ||||
14-Sep-17 | 15.50 | 15.25 | 1.41 | ||||
5-Oct-17 | 18.65 | 18.40 | (0.35) | ||||
2-Nov-17 | 18.80 | 18.55 | (0.05) | ||||
4-Jan-18 | 18.50 | 18.25 | (0.10) | ||||
1-Feb-18 | 18.55 | 18.30 | (0.10) | ||||
1-Mar-18 | 18.50 | 18.25 | 0.00 | ||||
5-Apr-18 | 18.35 | 18.10 | (0.20) | ||||
3-May-18 | 18.50 | 18.25 | 0.05 | ||||
Eurobonds | |||||||
Issuer | Description | Yield (%) | Day Change (%) | ||||
FGN | 6.38 12-Jul-23 | 5.73 | 0.00 | ||||
FGN | 7.875 16-Feb-32 | 6.95 | 0.00 | ||||
Fidelity Bank | 6.88 09-May-18 | 12.91 | 0.33 | ||||
GT Bank | 6.00 08-Nov-18 | 4.39 | 0.07 | ||||
Zenith Bank | 6.25 22-Apr-19 | 5.45 | 0.07 | ||||
First Bank | 8.25 07-Aug-20 | 10.64 | (0.01) | ||||
Access Bank | 7.677 24-Jun-21 | 9.41 | 0.04 |
Money Market Rates | |||||||
Current (%) | Previous (%) | ||||||
Open Buy Back (OBB) | 15.17 | 6.33 | |||||
Overnight (O/N) | 15.67 | 6.75 | |||||
FX Market | |||||||
Current (N/$) | Previous ( N/$) | ||||||
Interbank | 305.75 | 305.25 | |||||
CBN SMIS | 320.00 | 320.00 | |||||
I&E FX Window | 365.29 | 365.07 | |||||
Parallel Market | 365.50 | 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 – 16 June 2017 | |||||||
Tenor | Rate (%) | Offer (N’Bn) | Sub (N’Bn) | Sale (N’Bn) | |||
184 day | 18.00 | 5.00 | 1.05 | 1.05 | |||
352 day | 18.60 | 10.00 | 85.79 | 85.79 |
Sources: FMDQ, CBN, Bloomberg, Zedcrest research