DAILY MARKET REPORT: FIXED INCOME, MONEY MARKET AND FX – August 9, 2017

DAILY MARKET REPORT: FIXED INCOME, MONEY MARKET AND FX – August 9, 2017

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“News Update:
The economic lift that would come from the confirmation that Nigeria has exited recession will now have to wait a bit longer as the much awaited Gross Domestic Product (GDP) report for the second quarter of 2017 has been postponed due to lack of funds to mobilise the required data. The report was scheduled to be released on August 23, 2017 as indicated in the National Bureau of Statistics (NBS) data release calendar but has now been shifted by almost two weeks to Septem- ber 4. Also delayed by almost 2 weeks are the reports on the July 2017 inflation –  Business Day”

“The FGN Bond market retraced slightly today from its bearish trend in previ- ous days as trickles of demand flowed into bonds currently at their 6-month price lows. The most retracements were observed on the 2020(-13bps), 2024 (-7bps) and 2021(-6bps) bond maturities. The long end of the curve however remained sticky with only the 2036 bond retracing slightly by (-4bps). Yields consequently declined by 3bps across the curve. We expect this trend to be sustained tomorrow, with demand expected to also flow into the long end.

Minimal trades were executed in the T-bills market today owing to the tight liquidity in the money market. Most trades were done on the short end of the curve (Sept – Nov maturities) with an average yield decline of -5bps. The medium and long end traded flat as market players took their demand to the OMO auction by the CBN. We expect the market to remain scantily traded due to the tight liquidity in the money market and constant OMO sales by the CBN.

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There was a sharp rise in the OBB and OVN rates to 105% and 107.75% due to the OMO T-bills sales and Retail FX SMIS by the CBN. We expect rates to trend downwards tomorrow as cash inflows from c.N113billion OMO repay- ments are expected ease funding pressures in the market.”

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ECONOMIC INDICATORS
Inflation (YoY) 16.10%
Exchange Rate ($) N305.55
MPR 14.00%
Foreign Reserves $31.22Bn
Brent Crude $52.24

 

FGN Bonds
Description Bid (%) Offer (%) Day Change (%)
16.00 29-Jun-19 16.89 16.82 0.00
15.54 13-Feb-20 16.49 16.42 (0.13)
14.50 15-Jul-21 16.57 16.50 (0.06)
16.39 27-Jan-22 16.43 16.36 (0.03)
14.20 14-Mar-24 16.38 16.31 (0.07)
12.50 22-Jan-26 16.47 16.40 0.00
16.29 17-Mar-27 16.56 16.49 0.02
12.15 18-Jul-34 16.48 16.41 (0.01)
12.40 18-Mar-36 16.45 16.38 (0.04)
16.25 18-Apr-37 16.56 16.49 0.01
Treasury Bills
Description Bid (%) Offer (%) Day Change (%)
2-Nov-17 18.80 18.55 (0.20)
7-Dec-17 18.70 18.45 0.00
4-Jan-18 18.90 18.65 0.05
1-Feb-18 18.90 18.65 0.10
1-Mar-18 18.75 18.50 0.00
5-Apr-18 18.45 18.20 0.00
3-May-18 18.45 18.20 0.00
14-Jun-18 18.45 18.20 0.00
5-Jul-18 18.55 18.30 0.00
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Money Market Rates
  Current (%) Previous (%)
Open Buy Back (OBB) 105.00 25.00
Overnight (O/N) 107.75 26.33
FX Market
  Current (N/$) Previous ( N/$)
CBN Spot 305.55 305.50
CBN SMIS 320.00 320.00
I&E FX Window 367.50 368.17
Parallel Market 366.00 364.00
                             Primary Market Auction  Results            
NTB  – 2 August 2017
Tenor Rate (%) Offer (N’bn) Sub (N’bn) Sale (N’bn)
91 days 13.42 29.14 26.18 23.06
182 days 17.40 80.00 69.75 69.57
364 days 18.53 120.00 211.05 136.52
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 – 9 August 2017
Tenor Rate (%) Offer (NBn) Sub (N’bn) Sale (N’bn)
183 day 17.95 10.00 0.55 0.55
344 day 18.55 50.00 11.17 11.17

 

Eurobonds
Issuer Description Yield (%) Day Change (%)
FGN 6.38 12-Jul-23 5.49 0.02
FGN 7.875 16-Feb-32 6.75 0.04
First Bank 6.488 23-Jul-21 10.53 (0.03)
Eco bank 8.75 14-Aug-21 11.55 (0.01)
Access Bank 10.50 19-Oct-21 8.29 0.00
Zenith Bank 7.375 30-May-22 7.52 (0.01)
UBA 7.75 8-Jun-22 8.16 (0.01)

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

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