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

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“News Update:
In continuation of its foreign exchange supply drive, the Central Bank of Nigeria (CBN) on Mon- day intervened in the interbank segment of the market to the tune of $195million. Figures re- leased by the bank show that it offered the total sum of $100million to the wholesale segment, while the small and medium enterprises (SMEs) segment received the sum of $50 million. The invisibles segment, comprising tuition fees, medical payments and Basic Travel Allowance (BTA), among others, received $45 million.”

“The bond market was bearish today as offshore investors sold off some of their holdings on the 2019, 2020 and 2024 bond maturi- ties. Consequently, yields rose by an average of 3bps across the curve. We expect the market to remain client driven in the near term with a slight bearish bias.

We witnessed a slightly bullish T-bills market today as investors cherry picked specific maturities with attractive yields (August to December 2017 T-bills maturities). Trading volumes still remained weak as the CBN continued with its OMO issuance with total sale of N10.75billion at 17.94% (185day) and N31.28billion at 18.55% (346day).

We expect the market to be relatively quiet as attention shifts to the PMA scheduled for tomorrow.
The OBB and O/N rates slid lower to close at 5.00% and 5.67% as market liquidity was bolstered by cash inflows from bond coupon payments of c.N65.36billion. We expect rates to remain stable tomorrow in the absence of any liquidity tightening activities by the CBN”

ECONOMIC INDICATORS
Inflation (YoY) 16.10%
Exchange Rate ($) N315.00
MPR 14.00%
Foreign Reserves $30.36Bn
Brent Crude $49.01

 

FGN Bonds
Description Bid (%) Offer (%) Day Change (%)
16.00 29-Jun-19 16.60 16.63 0.10
15.54 13-Feb-20 16.42 16.41 0.06
14.50 15-Jul-21 16.30 16.25 0.02
16.39 27-Jan-22 16.16 16.12 0.03
14.20 14-Mar-24 16.06 16.04 0.05
12.50 22-Jan-26 16.29 16.19 (0.03)
16.29 17-Mar-27 16.26 16.19 0.00
12.15 18-Jul-34 16.09 16.06 0.04
12.40 18-Mar-36 16.07 16.03 0.03
16.25 18-Apr-37 16.24 16.19 0.02
Treasury Bills
Description Bid (%) Offer (%) Day Change (%)
3-Aug-17 17.65 17.40 (0.10)
14-Sep-17 17.45 17.20 0.45
19-Oct-17 14.25 14.00 (0.75)
2-Nov-17 18.80 18.55 0.00
7-Dec-17 18.75 18.50 0.00
4-Jan-18 18.75 18.50 0.00
1-Feb-18 18.20 17.95 (0.50)
1-Mar-18 18.70 18.45 0.00
5-Apr-18 18.70 18.45 0.00
3-May-18 18.65 18.40 (0.05)
14-Jun-18 18.70 18.45 0.00
5-Jul-18 18.60 18.35 0.00

 

Eurobonds
Issuer Description Yield (%) Day Change (%)
FGN 6.38 12-Jul-23 5.91 0.00
FGN 7.875 16-Feb-32 6.94 (0.02)
First Bank 6.488 23-Jul-21 10.83 0.01
Eco bank 8.75 14-Aug-21 11.91 (0.01)
Access Bank 10.50 19-Oct-21 8.51 0.01
Zenith Bank 7.375 30-May-22 7.94 (0.01)
UBA 7.75 8-Jun-22 8.81 (0.01)

 

Money Market Rates
  Current (%) Previous (%)
Open Buy Back (OBB) 5.00 6.17
Overnight (O/N) 5.67 6.92
FX Market
  Current (N/$) Previous ( N/$)
Interbank 315.00 305.90
CBN SMIS 320.00 320.00
I&E FX Window 363.57 362.21
Parallel Market 365.00
                             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 – 18 July 2017
Tenor Rate (%) Offer (NBn) Sub (N’bn) Sale (N’bn)
198 day 17.94 10.00 10.75 10.00
345 day 18.55 50.00 31.28 31.28

Sources: FMDQ, CBN, Bloomberg, Zedcrest research

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