“News Update:
The CBN sold a total of N205billion T-bills out of a total of N315billion subscribed by investors at today’s PMA. Rates cleared at 13.425%(91day), 17.3989%(182day) and 18.549%(364day) which were lower than rates at the previous auction which cleared at 13.50%, 17.70% and 18.599% respectively. This was due to increased demand from investors compared to a lower subscrip- tion of N211billion at the previous auction. The CBN will offer another N229billion T-bills at its next PMA on 3rd August as contained in its Q3 T-bills Calendar.”
“Portfolio switch by some PFAs and Local asset managers (sell bonds to buy higher yielding T-bills) triggered bearish sentiments in today’s session with significant selloffs witnessed on the 2020(-13bps), 2024(-7bps) and 2026(- 5bps) bond maturities. Consequently, yields rose by 3bps across the curve. We expect the market to remain bearish tomorrow, however at a slow pace as we expect renewed investors interest at these levels.
The T-bills market opened on a bullish note with demand skewed towards the short end on the backdrop of buoyant money market liquidity. This sentiment extended into the medium and long end of the curve as results from the PMA came out stronger than expected, resulting in an average yield decline of 15bps. We expect the market to remain bullish due to the persistent liquidity in the money market and spill over demand from to- day’s auction.
The OBB and O/N rates declined further in today’s session to close at 4.83% and 5.25% as liquidity conditions in the Money Market remained stable. Market liquidity is estimated at N234billion as at close of business today. In absence of any significant liquidity tightening activity by the CBN, we expect rates to decline further as cash inflows from OMO repay- ments of c.N97billion is expected to further boost liquidity tomorrow.”
ECONOMIC INDICATORS | |
Inflation (YoY) | 16.10% |
Exchange Rate ($) | N305.35 |
MPR | 14.00% |
Foreign Reserves | $30.36Bn |
Brent Crude | $49.47 |
FGN Bonds | ||||||
Description | Bid (%) | Offer (%) | Day Change (%) | |||
16.00 29-Jun-19 | 16.73 | 16.66 | 0.03 | |||
15.54 13-Feb-20 | 16.61 | 16.54 | 0.13 | |||
14.50 15-Jul-21 | 16.34 | 16.27 | 0.02 | |||
16.39 27-Jan-22 | 16.18 | 16.11 | (0.01) | |||
14.20 14-Mar-24 | 16.18 | 16.11 | 0.07 | |||
12.50 22-Jan-26 | 16.31 | 16.24 | 0.05 | |||
16.29 17-Mar-27 | 16.23 | 16.16 | (0.03) | |||
12.15 18-Jul-34 | 16.12 | 16.05 | (0.01) | |||
12.40 18-Mar-36 | 16.12 | 16.05 | 0.02 | |||
16.25 18-Apr-37 | 16.28 | 16.21 | 0.02 | |||
Treasury Bills | ||||||
Description | Bid (%) | Offer (%) | Day Change (%) | |||
3-Aug-17 | 16.50 | 16.25 | (1.15) | |||
14-Sep-17 | 16.15 | 15.90 | (1.30) | |||
19-Oct-17 | 14.00 | 13.75 | (0.25) | |||
2-Nov-17 | 18.75 | 18.50 | (0.05) | |||
7-Dec-17 | 18.70 | 18.45 | (0.05) | |||
4-Jan-18 | 18.75 | 18.50 | 0.00 | |||
1-Feb-18 | 18.35 | 18.10 | 0.15 | |||
1-Mar-18 | 18.60 | 18.35 | (0.10) | |||
5-Apr-18 | 18.65 | 18.40 | (0.05) | |||
3-May-18 | 18.55 | 18.30 | (0.10) | |||
14-Jun-18 | 18.55 | 18.30 | (0.15) | |||
5-Jul-18 | 18.50 | 18.25 | (0.10) |
Eurobonds | |||
Issuer | Description | Yield (%) | Day Change (%) |
FGN | 6.38 12-Jul-23 | 5.86 | (0.05) |
FGN | 7.875 16-Feb-32 | 6.91 | (0.05) |
First Bank | 6.488 23-Jul-21 | 10.71 | (0.11) |
Eco bank | 8.75 14-Aug-21 | 11.94 | 0.02 |
Access Bank | 10.50 19-Oct-21 | 8.51 | 0.01 |
Zenith Bank | 7.375 30-May-22 | 7.93 | (0.02) |
UBA | 7.75 8-Jun-22 | 8.79 | (0.03) |
Money Market Rates | ||||||||
Current (%) | Previous (%) | |||||||
Open Buy Back (OBB) | 4.83 | 5.00 | ||||||
Overnight (O/N) | 5.25 | 5.67 | ||||||
FX Market | ||||||||
Current (N/$) | Previous ( N/$) | |||||||
Interbank | 305.35 | 315.00 | ||||||
CBN SMIS | 320.00 | 320.00 | ||||||
I&E FX Window | 367.60 | 363.57 | ||||||
Parallel Market | 364.50 | 364.50 | ||||||
Primary Market Auction Results | ||||||||
NTB – 19 July 2017 | ||||||||
Tenor | Rate (%) | Offer (N’bn) | Sub (N’bn) | Sale (N’bn) | ||||
91 days | 13.4250 | 36.79 | 33.61 | 32.40 | ||||
182 days | 17.3989 | 39.18 | 27.43 | 26.60 | ||||
364 days | 18.5490 | 129.00 | 254.24 | 145.96 | ||||
FGN Bonds – 12 July 2017 | ||||||||
Tenor | Rate (%) | Offer (N’bn) | Sub (N’bn) | Sale (N’bn) | ||||
Jun-21 | 16.2400 | 35.00 | 9.10 | 3.90 | ||||
Mar-27 | 16.2500 | 50.00 | 55.31 | 47.01 | ||||
Apr-37 | 16.2514 | 50.00 | 64.75 | 55.05 | ||||
OMO – 18 July 2017 | ||||||||
Tenor | Rate (%) | Offer (NBn) | Sub (N’bn) | Sale (N’bn) | ||||
198 day | 17.94 | 10.00 | 10.75 | 10.00 | ||||
345 day | 18.55 | 50.00 | 31.28 | 31.28 |
Sources: FMDQ, CBN, Bloomberg, Zedcrest research