DAILY MARKET REPORT: FIXED INCOME, MONEY MARKET AND FX – JULY 18 2017

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“News Update:
Annual inflation in Nigeria eased for a fifth straight month in June, slowing to 16.1 percent form 16.25 percent in the month of May, the NBS said in its inflation report released today. A separate food price index however showed inflation at 19.91 per- cent, up from 19.27 percent in May, indicating continued pressure on food prices.”

“The bond market traded on a quiet note in today’s session as mar- ket players remained unmoved by the lower MoM inflation figure (16.1%) which was not far from market expectation. Consequently, yields stayed flat across maturities. We expect slight improve- ments in market activity tomorrow as market players look to rein- vest proceeds from the c.N93.49Billion bond coupon payments credited today/tomorrow.

The T-Bills market also traded on a relatively flat note with mini- mal activities recorded as the CBN continued with its OMO issu- ance in today’s session. Consequently, yields rose marginally by 5bps across the curve. We expect the market to continue with its current trend as the CBN maintains a tight monetary stance.

The OBB and O/N rates slid lower in today’s session to close at 6.17% and 6.92%. This was due to improvement in market liquidity which is estimated at N62billion as at close of business today. We expect rates to trend southward tomorrow on the backdrop of N65billion cash inflow from bond coupon payments.”

ECONOMIC INDICATORS
Inflation (YoY) 16.10%
Exchange Rate ($) N305.90
MPR 14.00%
Foreign Reserves $30.36Bn
Brent Crude $48.84

 

FGN Bonds
Description Bid (%) Offer (%) Day Change (%)
16.00 29-Jun-19 16.60 16.53 (0.01)
15.54 13-Feb-20 16.42 16.35 0.00
14.50 15-Jul-21 16.30 16.23 (0.01)
16.39 27-Jan-22 16.16 16.09 (0.01)
14.20 14-Mar-24 16.06 15.99 0.00
12.50 22-Jan-26 16.29 16.22 (0.03)
16.29 17-Mar-27 16.26 16.19 (0.01)
12.15 18-Jul-34 16.09 16.02 0.00
12.40 18-Mar-36 16.07 16.00 0.00
16.25 18-Apr-37 16.24 16.17 0.00
Treasury Bills
Description Bid (%) Offer (%) Day Change (%)
3-Aug-17 17.75 17.50 0.50
14-Sep-17 17.00 16.75 (0.25)
19-Oct-17 15.00 14.75 0.75
2-Nov-17 18.80 18.55 (0.15)
7-Dec-17 18.75 18.50 0.00
4-Jan-18 18.75 18.50 (0.15)
1-Feb-18 18.70 18.45 0.00
1-Mar-18 18.70 18.45 0.00
5-Apr-18 18.70 18.45 0.00
3-May-18 18.70 18.45 0.00
14-Jun-18 18.70 18.45 0.00
5-Jul-18 18.60 18.35 (0.10)

 

Eurobonds
Issuer Description Yield (%) Day Change (%)
FGN 6.38 12-Jul-23 5.91 (0.07)
FGN 7.875 16-Feb-32 6.96 (0.05)
First Bank 6.488 23-Jul-21 10.82 0.02
Eco bank 8.75 14-Aug-21 11.92 0.01
Access Bank 10.50 19-Oct-21 8.50 0.00
Zenith Bank 7.375 30-May-22 7.95 (0.01)
UBA 7.75 8-Jun-22 8.82 0.00

 

Money Market Rates
  Current (%) Previous (%)
Open Buy Back (OBB) 6.17 9.00
Overnight (O/N) 6.92 9.75
FX Market
  Current (N/$) Previous ( N/$)
Interbank 305.90 305.90
CBN SMIS 320.00 320.00
I&E FX Window 362.21 362.83
Parallel Market 365.00 364.50
                             Primary Market Auction  Results                                
NTB  – 19 July 2017
Tenor Offer (N’bn) Expected Rate (%)
91 days 36.79 13.40 – 13.50
182 days 39.18 17.40 – 17.60
364 days 129.00 18.50 – 18.65
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 – 17 July 2017
Tenor Rate (%) Offer (NBn) Sub (N’bn) Sale (N’bn)
185 day 17.95 5.00 6.29 6.29
346 day 18.55 50.00 14.50 14.50

Sources: FMDQ, CBN, Bloomberg, Zedcrest research

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