DAILY MARKET REPORT: FIXED INCOME, MONEY MARKET AND FX – JUNE 20, 2017

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Nigeria has successfully issued her first diaspora bond in the international capital market. The bond was over-subscribed by 300 percent and yielded $300 million at the rate of 5.625 per cent for a tenor of five years. With the successful issuance of the debut diaspora bond, Nigeria will establish a programme for raising funds from Nigerians in Diaspora to provide an avenue for their continuous participation in the development of the economy. – Leadership

ECONOMIC INDICATORS
Inflation (YoY) 16.25%
Exchange Rate ($) N305.80
MPR 14.00%
Foreign Reserves $30.21Bn
Brent Crude $45.60

“The Bond market continued on a bearish run as market players take posi- tions ahead of tomorrow’s auction. The 2019 and 2027 bonds yields inched up the most today (5bps) due to sell pressure by counterparties. This result- ed in an average yield increase of 3bps across the entire bond yield curve. We expect the market to be relatively active tomorrow as the bond auction takes center stage. The DMO plans to raise N140billion via FGN bonds at the auction tomorrow.

The Treasury bills market traded with mixed reactions today with demand on some specific maturities (21Sep and 21Dec 2017 T-bills) which will be re- issued at the auction tomorrow. The long end of the curve remained pretty flat as the CBN floated yet another OMO auction offering N5billion of 170day and N10billion of 345day T-bills with rates pegged at 18.00%-18.60% respec- tively.

We expect a quiet trading session tomorrow due to the NTB PMA. OBB and O/N rates moderated to 29.50% and 34.50% as commercial banks could access the SLF window to fund their obligations. Market liquidity is estimated to close at N18billion negative after the sale of N11.3billion OMO T-bills. We expect interest rates to remain elevated as CBN continues its FX interventions and OMO auctions.”

FGN Bonds
Description Bid (%) Offer (%) Day Change (%)
16.00 29-Jun-19 16.52 16.45 0.05
15.54 13-Feb-20 16.39 16.32 0.04
14.50 15-Jul-21 16.35 16.28 0.03
16.39 27-Jan-22 16.21 16.14 0.04
14.20 14-Mar-24 15.92 15.85 0.04
12.50 22-Jan-26 16.15 16.08 0.07
12.50 22-Jan-27 16.29 16.22 0.07
12.15 18-Jul-34 16.05 15.98 0.04
12.40 18-Mar-36 16.07 16.00 0.04
FGN Treasury Bills
Description Bid (%) Offer (%) Day Change (%)
3-Aug-17 18.40 18.15 (0.60)
14-Sep-17 15.65 15.40 (1.85)
5-Oct-17 18.60 18.35 0.00
2-Nov-17 18.60 18.35 (0.25)
4-Jan-18 18.70 18.45 0.15
1-Feb-18 18.60 18.35 (0.10)
1-Mar-18 18.50 18.25 0.00
5-Apr-18 18.50 18.25 (0.10)
3-May-18 18.50 18.25 (0.10)

 

Money Market Rates
Current (%) Previous (%)
Open Buy Back (OBB) 29.50 50.00
Overnight (O/N) 34.50 53.33
FX Market
Current (N/$) Previous ( N/$)
Interbank 305.80 305.80
CBN SMIS 320.00 320.00
I&E FX Window 361.67 366.20
Parallel Market 366.00
Primary Market Auction Results      
NTB Offer – 21 June 2017
Tenor Offer (N’bn) Expected Stop Rate (%)
91 days 28.12 13.45 – 13.55
182 days 55.12 17.35 -17.45
364 days 50.00 18.55 – 18.65
FGN Bonds Offer – 21 June 2017
Tenor Offer (N’bn) Expected Stop Rate (%)
Jun-21 40.00 16.25 – 16.35
Mar-27 50.00 16.25 – 16.35
Apr-37 50.00 16.25 – 16.35
OMO – 20 June 2017
Tenor Rate (%) Offer (NBn) Sub (NBn) Sale (NBn)
170 day 18.00 5.00 1.32 1.32
345 day 18.60 10.00 12.44 10.00

 

Eurobonds
Issuer Description Yield (%) Day Change (%)
FGN 6.38 12-Jul-23 6.14 0.34
FGN 7.875 16-Feb-32 7.22 0.26
Fidelity Bank 6.88 09-May-18 12.92 0.18
GT Bank 6.00 08-Nov-18 4.46 0.07
Zenith Bank 6.25 22-Apr-19 5.79 0.24
First Bank 8.25 07-Aug-20 10.66 0.01
Access Bank 7.677 24-Jun-21 9.58 0.13

Sources: FMDQ, CBN, Bloomberg, Zedcrest research

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