DAILY MARKET REPORT: FIXED INCOME, MONEY MARKET AND FX – August 17, 2017

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News Update:

As part of efforts to further strengthen the value of the Naira on the parallel market segment of the foreign exchange (forex) market, the Central Bank of Nigeria (CBN) has directed that payments for port charges to the Nigerian Ports Authority (NPA) and Nigerian Maritime Administration and Safety Agency (NIMASA) by oil marketing companies should henceforth be accommodated in the official Forex window. – ThisDay

ECONOMIC INDICATORS
Inflation (YoY) 16.10%
Exchange Rate ($) N305.65
MPR 14.00%
Foreign Reserves $31.36Bn
Brent Crude $50.65

“The FGN Bond market witnessed further bullish retracements today with significant yield declines witnessed across the curve especially on the 19s (-16bps) and 27s(-15bps), due to renewed demand for bonds at current yield levels. Average bond yield declined by -9bps, a 5bps improvement from the -4bps recorded yesterday. We expect the market to maintain a slightly bullish posture tomorrow as investors anticipate further compres- sion of the yield curve ahead of the bond auction scheduled for August 23.

The T-bills market also traded on a bullish note as demand flowed into the market in anticipation of inflows from OMO maturities (c.N168bn) and Retail FX refunds by the CBN. Average T-bills yield consequently declined by –28bps(est.). The OBB and OVN rates eased lower to close at 20.83% and 22.42%, as there was no significant change in market liquidity from previous day’s level. We expect rates to trend downward tomorrow due to the anticipated inflows into the market.
Results from today’s PMA showed that the CBN sold a total of N32billion (91day) and N30billion (182 day) NTBs, with rates clearing at 13.35% and 17.35% respectively. The next PMA would be held on the 30th of August, with about N193billion maturing NTBs to be rolled over.”

FGN Bonds
Description Bid (%) Offer (%) Day Change (%)
16.00 29-Jun-19 16.87 16.80 (0.16)
15.54 13-Feb-20 16.60 16.53 (0.10)
14.50 15-Jul-21 16.48 16.41 (0.12)
16.39 27-Jan-22 16.43 16.36 (0.03)
14.20 14-Mar-24 16.35 16.28 (0.07)
12.50 22-Jan-26 16.47 16.40 (0.07)
16.29 17-Mar-27 16.48 16.41 (0.15)
12.15 18-Jul-34 16.46 16.39 (0.02)
12.40 18-Mar-36 16.50 16.43 (0.07)
16.25 18-Apr-37 16.56 16.49 (0.08)
Treasury Bills
Description Bid (%) Offer (%) Day Change (%)
2-Nov-17 20.00 19.75 0.00
7-Dec-17 19.40 19.15 0.00
4-Jan-18 19.45 19.20 0.15
1-Feb-18 18.85 18.60 (0.40)
1-Mar-18 19.00 18.75 (0.10)
5-Apr-18 18.90 18.65 (0.25)
3-May-18 18.70 18.45 (0.05)
14-Jun-18 18.50 18.25 0.00
5-Jul-18 18.65 18.40 0.00
2-Aug-18 18.35 18.10 (0.05)

 

Money Market Rates
  Current (%) Previous (%)
Open Buy Back (OBB) 20.83 27.33
Overnight (O/N) 22.42 29.25
FX Market
  Current (N/$) Previous ( N/$)
CBN Spot 305.65 305.65
CBN SMIS 320.00 320.00
I&E FX Window 359.69 362.38
Parallel Market 366.50 366.00
                             Primary Market Auction  Results                                
NTB  – 17 August 2017
Tenor Rate (%) Offer (N’bn) Sub (N’bn) Sale (N’bn)
91 days 13.35 32.44 33.04 32.44
182 days 17.35 30.00 34.75 30.00
364 days
FGN Bonds – 23 August 2017
Tenor Offer (N’bn) Expected Stop Rate (%)
Jun-21 35.00 TBA
Mar-27 50.00 TBA
Apr-37 50.00 TBA
OMO – 15 August 2017
Tenor Rate (%) Offer (NBn) Sub (N’bn) Sale (N’bn)
191 day 17.95 5.00 0.08 0.08
359 day 18.55 20.00 25.29 25.29

 

Eurobonds
Issuer Description Yield (%) Day Change (%)
FGN 6.38 12-Jul-23 5.58 0.00
FGN 7.875 16-Feb-32 6.84 0.00
First Bank 6.488 23-Jul-21 10.55 0.00
Eco bank 8.75 14-Aug-21 11.51 0.00
Access Bank 10.50 19-Oct-21 8.26 (0.03)
Zenith Bank 7.375 30-May-22 7.48 (0.01)
UBA 7.75 8-Jun-22 8.20 0.00

 

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

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