DAILY MARKET REPORT: FIXED INCOME, MONEY MARKET AND FX – JULY 11 2017

DAILY MARKET REPORT: FIXED INCOME, MONEY MARKET AND FX – JULY 11 2017

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“News Update:
The federal government Monday disclosed that it would restructure the total debts owed to service providers in Nigeria’s privatised electricity market by the 11 electricity distribution companies (Discos) with the aim of easing the debt burden and allowing them to source for monies to fund their capital projects. – Thisday”

“The bond market remained lethargic with minimal activities witnessed during the trading session. We saw some local demand for the 2020 and 2022 bonds while other maturities traded flat. Yields compressed by 1bp across the curve. We expect a quiet trading session tomorrow as the FGN bond auction takes center stage.

The T-bills market traded with mixed sentiments with some buys on the short end and profit taking on the medium and long end of the curve. Consequently, yields declined by an average of 61bps on the short end while the medium and long tenured bills appreciated by an average of 9bps. The CBN continued with its OMO auctions today, selling a total of N24.6billion OMO T-bills with rates clearing at 17.95% and 18.55% on the 199day and 360day maturities. We expect the market to remain largely driven by the liquidity conditions in the money market.

The liquidity conditions in the money market improved in today’s session as the OBB and O/N rates fell to 15% and 16.17% from 25% levels. This was as a result of cash inflows from Retail FX refunds by the CBN. Market Liquidity is estimated at N68billion negative as at close of business today. We expect rates to trend slightly higher tomorrow as the CBN continues to mop up liquidity via its daily OMO and FX auctions.”

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ECONOMIC INDICATORS
Inflation (YoY) 16.25%
Exchange Rate ($) N306.00
MPR 14.00%
Foreign Reserves $30.33Bn
Brent Crude $47.64
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FGN Bonds
Description Bid (%) Offer (%) Day Change (%)
16.00 29-Jun-19 16.55 16.48 0.01
15.54 13-Feb-20 16.40 16.33 (0.05)
14.50 15-Jul-21 16.31 16.24 (0.01)
16.39 27-Jan-22 16.14 16.07 (0.05)
14.20 14-Mar-24 16.00 15.93 0.00
12.50 22-Jan-26 16.31 16.24 0.01
16.29 17-Mar-27 16.28 16.21 0.00
12.15 18-Jul-34 16.02 15.95 0.01
12.40 18-Mar-36 16.02 15.95 0.01
FGN Treasury Bills
Description Bid (%) Offer (%) Day Change (%)
3-Aug-17 18.05 17.80 (0.95)
14-Sep-17 15.75 15.50 (0.25)
19-Oct-17 16.30 16.05 (1.50)
2-Nov-17 18.90 18.65 0.25
7-Dec-17 18.80 18.55 0.00
4-Jan-18 18.70 18.45 0.00
1-Feb-18 18.80 18.55 0.20
1-Mar-18 18.70 18.45 0.10
5-Apr-18 18.80 18.55 0.05
3-May-18 18.60 18.35 0.10
14-Jun-18 18.60 18.35 0.10

 

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Eurobonds
Issuer Description Yield (%) Day Change (%)
FGN 6.38 12-Jul-23 6.14 (0.19)
FGN 7.875 16-Feb-32 7.12 (0.17)
First Bank 6.488 23-Jul-21 10.89 0.19
Eco bank 8.75 14-Aug-21 11.92 (0.03)
Access Bank 10.50 19-Oct-21 8.49 (0.01)
Zenith Bank 7.375 30-May-22 7.92 0.03
UBA 7.75 8-Jun-22 9.08 0.11

 

                             Primary Market Auction  Results 
NTB  – 05 July 2017
Tenor Rate (%) Offer (N’bn) Sub (N’bn) Sale (N’bn)
91 days 13.50 35.00 28.84 28.69
182 days 17.50 22.00 21.41 21.25
364 days 18.599 120.00 161.19 127.06
FGN Bonds – 12 July 2017
Tenor Offer (N’bn) Expected Rates (%)
Jun-21 30 – 40 16.15 – 16.20
Mar-27 45 – 55 16.15 – 16.20
Apr-37 45 – 55 16.15 – 16.20
OMO – 11 July 2017
Tenor Rate (%) Offer (NBn) Sub (N’bn) Sale (N’bn)
199 day 17.95 5.00 0.306 0.306
360 day 18.55 30.00 27.34 24.34

 

Money Market Rates
Current (%) Previous (%)
Open Buy Back (OBB) 15.00 25.33
Overnight (O/N) 16.17 28.17
FX Market
Current (N/$) Previous ( N/$)
Interbank 306.00 306.00
CBN SMIS 320.00 320.00
I&E FX Window 363.33 361.86
Parallel Market 365.00 365.00

Sources: FMDQ, CBN, Bloomberg, Zedcrest research

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