DAILY MARKET REPORT: FIXED INCOME, MONEY MARKET AND FX – JULY 4 2017

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“News Update:

In continuation of its drive to ensure liquidity and stability in the foreign exchange market, the Central Bank of Nigeria (CBN) on Monday injected the total sum of $195 million into various segments of the inter-bank foreign exchange market. The Acting Director, Corporate Communi- cations at the CBN, Isaac Okorafor, who confirmed the figures, said the bank’s continued inter- vention was aimed at strengthening the international value of the Naira. – Thisday”

“The Bond market traded on a flat note today with only few trades executed across maturities. We expect the market to remain client driven in the near term as we await release of the FGN bond issuance calendar for Q3 2017.

The T-bills market traded scantily with some buying seen on the short end and sell off on the medium end of the curve. The long end remained flat as the CBN conducted another OMO session. Consequently, yields compressed by an average of 3bps across the curve. We expect the market to be calm tomorrow as market players position themselves for the T-bills PMA.

The OBB and O/N rates rose significantly higher today to close at 44.17% and 50.92% respectively due to the OMO T-bills sales of N27.8billion and Retail SMIS auction by the CBN which continued to put pressure on naira liquidity. System liquidity is estimated at N72billion negative as at COB to- day. We expect the rates to remain at these levels, however, the maturity of OMO T-bills before the end of the week is expected to calm interest rates.”

ECONOMIC INDICATORS
Inflation (YoY) 16.25%
Exchange Rate ($) N305.95
MPR 14.00%
Foreign Reserves $30.27Bn
Brent Crude $49.29

 

FGN Bonds
Description Bid (%) Offer (%) Day Change (%)
16.00 29-Jun-19 16.51 16.44 (0.01)
15.54 13-Feb-20 16.44 16.37 (0.01)
14.50 15-Jul-21 16.29 16.22 (0.01)
16.39 27-Jan-22 16.14 16.07 (0.01)
14.20 14-Mar-24 15.90 15.83 (0.02)
12.50 22-Jan-26 16.12 16.05 0.03
16.29 17-Mar-27 16.18 16.11 0.00
12.15 18-Jul-34 15.97 15.90 (0.01)
12.40 18-Mar-36 15.99 15.92 0.00
FGN Treasury Bills
Description Bid (%) Offer (%) Day Change (%)
5-Oct-17 18.25 18.00 (0.20)
2-Nov-17 18.90 18.25 0.20
7-Dec-17 18.10 17.90 0.05
4-Jan-18 18.90 18.30 0.10
1-Feb-18 18.70 18.30 0.15
1-Mar-18 18.60 18.15 0.20
5-Apr-18 18.45 18.35 0.00
3-May-18 18.45 18.25 (0.10)
14-Jun-18 18.45 18.35 0.05

 

 

Money Market Rates
Current (%) Previous (%)
Open Buy Back (OBB) 44.17 14.83
Overnight (O/N) 50.92 15.67
FX Market
Current (N/$) Previous ( N/$)
Interbank 305.95 305.95
CBN SMIS 320.00 320.00
I&E FX Window 363.33 359.00
Parallel Market 364.00 364.00
                             Primary Market Auction  Results     
NTB  – 05 July 2017
Tenor Offer (N’bn) Expected Rates (%)
91 days 35.00 13.45 – 13.55
182 days 22.00 17.25 – 17.50
364 days 120.00 18.50 – 18.65
FGN Bonds – 21 June 2017
Tenor Rate (%) Offer (NBn) Sub (N’bn) Sale (N’bn)
Jun-21 16.1900 40.00 12.52 4.22
Mar-27 16.1900 50.00 57.35 30.25
Apr-37 16.1965 50.00 88.24 64.79
OMO – 20 June 2017
Tenor Rate (%) Offer (NBn) Sub (N’bn) Sale (N’bn)
156 day 17.90 5.00 0.11 0.11
338 day 18.55 30.00 27.75 27.75

 

Eurobonds
Issuer Description Yield (%) Day Change (%)
FGN 6.38 12-Jul-23 5.80 0.01
FGN 7.875 16-Feb-32 6.95 0.00
First Bank 6.488 23-Jul-21 11.14 0.06
Ecobank 8.75 14-Aug-21 11.93 0.01
Access Bank 10.50 19-Oct-21 8.46 0.02
Zenith Bank 7.375 30-May-22 7.77 0.00
UBA 7.75 8-Jun-22 8.68 0.01

Sources: FMDQ, CBN, Bloomberg, Zedcrest research

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