DAILY MARKET REPORT: FIXED INCOME, MONEY MARKET AND FX – August 2 2017

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“News Update:
The Central Bank of Nigeria (CBN) yesterday said Nigeria’s manufacturing sector has rec- orded expansion in production activities for four consecutive times in its Purchasing Man- agers’ Index (PMI). The implication of this positive outcome which also confirms last quar- ter’s GDP growth recovery as well as last month’s inflation moderation are signs that the Nigerian economy may soon exit recession and return to the path of growth. – Guardian”

“There were no active trades in the fixed income market today ow- ing to the suspension of trading in the two-way quote market by the FMDQ. Activities in the market are expected to resume fully tomorrow, with bullish sentiments expected to prevail due to ex- pected cash inflows from OMO maturities and spill over demand from the T-bills PMA.

The OBB and O/N rates rose sharply from 5% levels yesterday to close today at 19.67% and 20.17% due to an estimated sale of N250billion special T-bills of 183 days tenor to banks at 17.20%, debited late yesterday from the system. Market liquidity is esti- mated at N75billion long at close of business today.

We expect rates to trend back lower as inflows from N85.42billion OMO ma- turities are expected to improve market liquidity, not discounting the possibility of another round of OMO auction by the CBN.”

ECONOMIC INDICATORS
Inflation (YoY)16.10%
Exchange Rate ($)N305.60
MPR14.00%
Foreign Reserves$30.77Bn
Brent Crude$51.50

 

FGN Bonds
DescriptionBid (%)Offer (%)Day Change (%)
16.00 29-Jun-1916.7616.690.00
15.54 13-Feb-2016.5016.430.00
14.50 15-Jul-2116.3816.310.00
16.39 27-Jan-2216.2216.150.00
14.20 14-Mar-2416.3016.230.00
12.50 22-Jan-2616.2816.210.00
16.29 17-Mar-2716.3016.230.00
12.15 18-Jul-3416.1816.110.00
12.40 18-Mar-3616.2216.150.00
16.25 18-Apr-3716.3216.250.00
Treasury Bills
DescriptionBid (%)Offer (%)Day Change (%)
2-Nov-1718.3518.100.00
7-Dec-1718.2017.950.00
4-Jan-1818.5518.300.00
1-Feb-1818.0517.800.00
1-Mar-1818.1517.900.00
5-Apr-1818.5018.250.00
3-May-1818.5018.250.00
14-Jun-1818.5018.250.00
5-Jul-1818.5518.300.00

 

Eurobonds
IssuerDescriptionYield (%)Day Change (%)
FGN6.38 12-Jul-235.49(0.07)
FGN7.875 16-Feb-326.70(0.03)
First Bank6.488 23-Jul-2110.58(0.03)
Eco bank8.75 14-Aug-2111.780.00
Access Bank10.50 19-Oct-218.33(0.03)
Zenith Bank7.375 30-May-227.77(0.02)
UBA7.75 8-Jun-228.200.00

 

Money Market Rates
 Current (%)Previous (%)
Open Buy Back (OBB)19.675.00
Overnight (O/N)20.175.50
FX Market
Current (N/$)Previous ( N/$)
Interbank305.60305.60
CBN SMIS320.00320.00
I&E FX Window368.50366.59
Parallel Market363.00363.00
                             Primary Market Auction  Results                                
NTB  – 2 August 2017
TenorRate (%)Offer (N’bn)Sub (N’bn)Sale (N’bn)
91 days13.4229.1426.1823.06
182 days17.4080.0069.7569.57
364 days18.53120.00211.05136.52
FGN Bonds – 12 July 2017
TenorRate (%)Offer (N’bn)Sub (N’bn)Sale (N’bn)
Jun-2116.240035.009.103.90
Mar-2716.250050.0055.3147.01
Apr-3716.251450.0064.7555.05
OMO – 31 July 2017
TenorRate (%)Offer (NBn)Sub (N’bn)Sale (N’bn)
198 day17.9510.008.848.84
345 day18.5570.0051.9651.96

Sources: FMDQ, CBN, Bloomberg, Rexel BDC, Zedcrest research