KEY INDICATORS
| Indicator | Value | Commentary |
| Inflation | 12.82% | As at July 2020. A 26bps increase from 12.56% recorded in June 2020 |
| MPR | 12.50% | As at the July 20, 2020 MPC Meeting. Maintained at 12.50% |
| External Reserves | $35.77bp | As at Sep. 07, 2020. A c.0.18% increase from $35.70bp on Sep. 04, 2020 |
| Brent Crude | $40.90pb | As at Sep. 09, 2020. A c.6.12% decrease from $39.45pb on Sep. 08, 2020 |
FGN Bonds
Bullish sentiments persisted in the FGN Bonds market in today’s trading session as bids continued to improve across the bond curve. Demand was skewed to the belly of the curve, with the most active papers 2026s and 2028s trading at 6.60% and 8.00% levels respectively. We also noted some demand for the 2035s paper, which changed hands at 9.50%. Yields compressed by c.6bps on the average across the benchmark curve.
We expect the bullish trend in the market to continue in the interim, supported by ample liquidity available to local fund managers.
Benchmark FGN Bonds
| Description | Bid (%) | Offer (%) | Day Change (%) | |
| 16.39 27-Jan-22 | 5.00 | 3.45 | 0.00 | |
| 12.75 27-Apr-23 | 5.65 | 4.40 | 0.05 | |
| 14.20 14-Mar-24 | 5.65 | 4.40 | (0.15) | |
| 13.53 23-Mar-25 | 6.15 | 5.30 | 0.00 | |
| 12.50 22-Jan-26 | 7.25 | 6.50 | 0.00 | |
| 16.29 17-Mar-27 | 8.15 | 7.85 | 0.00 | |
| 13.98 23-Feb-28 | 8.20 | 7.90 | (0.10) | |
| 14.55 26-Apr-29 | 8.80 | 8.30 | (0.35) | |
| 12.15 18-Jul-34 | 9.90 | 9.50 | (0.10) | |
| 12.40 18-Mar-36 | 10.00 | 9.65 | (0.05) | |
| 16.2499 18-Apr-37 | 10.00 | 9.75 | (0.05) | |
| 14.80 26-Apr-49 | 10.05 | 9.90 | 0.00 | |
Nigerian Treasury Bills
The OMO bills market continued to push in one direction, taking a breather today in terms of volumes traded.
Bids improved for another consecutive session as local banks continued to trade their excess liquidity positions. Rates compressed by c.77bps on the average across the benchmark OMO curve to close the session.
Rates on NTBs also moved downwards in anticipation of a bullish outcome at the bi-weekly primary auction. Rates compressed by c.25bps on the average across the benchmark NTB curve.
At the PMA, the DMO has rolled over a total of N128.06BN at today’s auction of NTBs. Ample demand, especially for the 1-year paper, saw stop rates drop by c.20bps on the average across the 3 tenors offered.
We expect a more active session tomorrow as the market looks to the CBN to float an OMO auction to manage excess liquidity levels.
AUCTION RESULT
| NTB – 10 Sept. 2020 | ||||||
| Tenor | Rate (%) | Offer (₦’bn) | Sub (₦’bn) | Sale (₦’bn) | Previous Rate (%) | Changes |
| 91 days | 1.100 | 4.41 | 8.62 | 4.41 | 1.1450 | -0.0450 |
| 182 days | 1.550 | 14.00 | 22.92 | 14.00 | 1.8000 | -0.2500 |
| 364 days | 3.050 | 109.65 | 230.86 | 109.65 | 3.3400 | -0.2900 |
Benchmark OMO Bills
| Description | Bid (%) | Offer (%) | Day Change (%) |
| NGOMO 10/1/2020 | 3.00 | 0.01 | (1.00) |
| NGOMO 11/03/2020 | 3.00 | 0.01 | (1.00) |
| NGOMO 12/01/2020 | 4.00 | 0.01 | 0.00 |
| NGOMO 01/05/2021 | 4.00 | 0.01 | (1.00) |
| NGOMO 02/02/2021 | 4.00 | 0.01 | (1.00) |
| NGOMO 03/02/21 | 4.00 | 0.01 | (1.00) |
| NGOMO 05/11/21 | 5.00 | 0.01 | (0.40) |
| NGOMO 06/08/21 | 5.00 | 0.01 | (1.00) |
| NGOMO 08/10/21 | 5.00 | 0.01 | (0.50) |
| Benchmark NTBills | |||
| Description | Bid (%) | Offer (%) | Day Change (%) |
| NIGTB 10/1/2020 | 2.00 | 0.01 | (0.50) |
| NIGTB 11/12/2020 | 2.00 | 0.01 | (1.00) |
| NIGTB 12/31/2020 | 3.00 | 0.01 | 0.00 |
| NIGTB 01/14/2021 | 3.00 | 0.01 | 0.00 |
| NIGTB 02/11/2021 | 3.00 | 0.01 | (0.50) |
| NIGTB 04/29/2021 | 3.00 | 0.01 | (0.50) |
| NIGTB 05/13/21 | 4.00 | 0.01 | 0.50 |
| NIGTB 06/10/21 | 4.00 | 0.01 | 0.00 |
| NIGTB 07/01/21 | 4.00 | 0.01 | 0.00 |
| NIGTB 08/26/21 | 4.00 | 0.01 | 0.00 |
Money Markets
Interbank rates inched up slightly as market liquidity tightened by 11.48%, opening the day at c.N480.90bn positive. Rates closed higher by c.24bps on the average, as OBB and OVN rates closed the day at 1.50% and 2.38% respectively.
We expect rates to remain stable tomorrow in the lower single-digit range, with the outside chance an OMO auction by the CBN debit the only threat to current market rates.
Money Market Rates
| Current (%) | Previous (%) | |
| Open Buy Back (OBB) | 1.50 | 1.30 |
| Overnight (O/N) | 2.38 | 2.10 |
FX Market
The interbank I&E market continued to trade on a calm note, with traded volumes up by 15% ($40.43mio traded). Bids ranged within a tight band of N3.00k, the tightest seen in the past two weeks. The closing rate appreciated by N0.21k to close at N386.00/$.
The second session of supply of dollars by the CBN to BDCs came in today, although having little impact on rates as the demand on the streets continued to swallow the CBN’s supply. The cash rate remained unchanged while the transfer rate strengthened by N2.00k to close at N455.00/$.
FX Market
| Current (N/$) | Previous ( N/$) | |
| CBN Spot | 379.00 | 379.00 |
| CBN SMIS | 380.69 | 380.69 |
| I&E FX Window | 386.00 | 386.21 |
| Cash Market | 440.00 | 440.00 |
| Transfer Market | 455.00 | 457.00 |
Eurobonds
The NIGERIA Sovereigns had another weak session, despite the slight come back of global oil prices (3.68% higher D/D). Yields on the sovereign curve weakened by c.4bps on the average. Despite this, the NIGERIA continued to outperform its oil-related counterpart, ANGOLA as yields on those weakened by another c.8bps for a second consecutive session.
