DAILY MARKET REPORT: FIXED INCOME, MONEY MARKET AND FX – JUNE 14 2017

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The bond market witnessed some demand today with special emphasis on the 2027 bonds. Offshore investors are currently testing the waters with little trickles of buy orders on FGN bonds with the current FX market stability. We expect the market to trade cautiously with client orders dominating market sentiment.

The T-bills market traded with mixed sentiments today with an initial sell off on the short and medium end of the curve at the start of market and aggressive buying subsequently. Trading activity was skewed towards the short end of the curve ( 7- 30 TTM) with total trade volumes of c.N150Billion. The medium and long end was relatively flat due to the Treasury PMA that took place today.

We anticipate a bullish market tomorrow on the back of N205 billion OMO T-bills repayment. The OBB and O/N rates further declined today to close at 16.33% and 17.33% due to the slight improvement in market liquidity coming from excess naira refunds from Retail FX sales . Market liquidity is estimated at N65billion deficit as at close of business today . We expect interest rates to decline steeply tomorrow due to OMO T-bills maturities.

ECONOMIC INDICATORS
Inflation (YoY) 17.24%
Exchange Rate ($) N305.70
MPR 14.00%
Foreign Reserves $30.28Bn
Crude Oil Price $46.90

 

FGN Bonds
Description Bid (%) Offer (%) Day Change (%)
16.00 29-Jun-19 16.52 16.45 0.00
15.54 13-Feb-20 16.43 16.36 0.01
14.50 15-Jul-21 16.47 16.4 0.05
16.39 27-Jan-22 16.07 16.00 (0.13)
14.20 14-Mar-24 16.04 15.97 0.09
12.50 22-Jan-26 16.11 16.04 (0.07)
12.50 22-Jan-27 16.31 16.24 (0.01)
12.15 18-Jul-34 16.01 15.94 (0.02)
12.40 18-Mar-36 16.03 15.96 (0.03)
FGN Treasury Bills
Description Bid (%) Offer (%) Day Change (%)
3-Aug-17 19.38 19.13 0.38
14-Sep-17 17.10 16.85 (0.75)
5-Oct-17 19.06 18.81 0.06
2-Nov-17 18.71 18.46 (0.19)
4-Jan-18 19.12 18.87 0.07
1-Feb-18 19.03 18.78 (0.07)
1-Mar-18 18.69 18.44 (0.11)
5-Apr-18 18.68 18.43 0.03
3-May-18 18.56 18.31 (0.04)

 

Money Market Rates
Current (%) Previous (%)
Open Buy Back (OBB) 16.33 24.17
Overnight (O/N) 17.33 26.92
FX Market
Current (N/$) Previous ( N/$)
Interbank 305.70 305.70
CBN SMIS 320.00 320.00
I&E FX Window 367.17 372.71
Parallel Market 365.00 365.00
                             Primary Market Auction  Results         
NTB – 14 June 2017
Tenor Rate (%) Offer (N’Bn) Sub (N’Bn) Sale (N’Bn)
91 days TBA 39.06 TBA TBA
182 days TBA 23.02 TBA TBA
364 days TBA 174.64 TBA TBA
FGN Bonds – June 2017
Tenor Rate (%) Offer (N’Bn) Sub (N’Bn) Sale (N’Bn)
21-Jun TBD 40.00 N/A N/A
27-Mar TBD 50.00 N/A N/A
Apr-37 TBD 50.00 N/A N/A
OMO – 13 June 2017
Tenor Rate (%) Offer (N’Bn) Sub (N’Bn) Sale (N’Bn)
184 day 18.00 5.00 0.32 0.32
352 day 18.60 10.00 1.80 1.80

 

Eurobonds
Issuer Description Yield (%) Day Change (%)
FGN 6.38 12-Jul-23 5.59 0.04
FGN 7.875 16-Feb-32 6.87 0.06
Fidelity Bank 6.88 09-May-18 12.56 (0.17)
GT Bank 6.00 08-Nov-18 4.32 0.02
Zenith Bank 6.25 22-Apr-19 5.36 (0.02)
First Bank 8.25 07-Aug-20 10.6 (0.05)
Access Bank 7.677 24-Jun-21 9.33 0.01

 

 

 

 

 

(FMDQ, CBN, Bloomberg, Zedcrest)

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