DAILY MARKET REPORT: FIXED INCOME, MONEY MARKET AND FX – JUNE 21 2017

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News Update:

The World Bank has approved two Programme-for-Results operations totaling $961m to support Nigeria’s federal and state governments in their effort to foster inclusion and revive growth, in alignment with the Economic Recovery and Growth Plan of the Federal Government of Nigeria for 2017–2020.
Source: Punch

The Bond market continued on a bearish run with trades skewed towards the short end of the curve.The 2019 and 2022 bonds yields inched up the most today (7bps) due to sell pressure by counterparties. This resulted in an average yield increase of 4bps across the entire bond yield curve. We expect the market to be moderately bullish tomorrow as investors who missed out of the bond auction come to the secondary market to fill their demand.

The Treasury bills market was largely bearish today due to profit taking activities by counterparties, coupled with the ample liquidity in the Mon- ey Market. Consequently, T-bills yields increased by 25bps across the en- tire yield curve. We expect the sell-off to moderate tomorrow as market liquidity improves significantly.

OBB and O/N rates moderated further to 18.00% and 19.00% as commer- cial banks could access the SLF window to fund their obligations. We ex- pect interest rates to decline tomorrow as N153billion OMO T-bills ma- ture into the system. The CBN will be poised to manage excess liquidity by floating OMO.

ECONOMIC INDICATORS
Inflation (YoY) 16.25%
Exchange Rate ($) N305.85
MPR 14.00%
Foreign Reserves $30.21Bn
Brent Crude $45.83

 

FGN Bonds
Description Bid (%) Offer (%) Day Change (%)
16.00 29-Jun-19 16.61 16.54 0.09
15.54 13-Feb-20 16.44 16.37 0.05
14.50 15-Jul-21 16.41 16.34 0.06
16.39 27-Jan-22 16.23 16.16 0.02
14.20 14-Mar-24 15.96 15.89 0.04
12.50 22-Jan-26 16.19 16.12 0.04
12.50 22-Jan-27 16.32 16.25 0.03
12.15 18-Jul-34 16.06 15.99 0.01
12.40 18-Mar-36 16.07 16.00 0.00
FGN Treasury Bills
Description Bid (%) Offer (%) Day Change (%)
3-Aug-17 18.50 18.25 0.10
14-Sep-17 15.25 15.00 (0.40)
5-Oct-17 18.90 18.65 0.30
2-Nov-17 18.95 18.70 0.35
4-Jan-18 19.00 18.75 0.30
1-Feb-18 18.70 18.45 0.10
1-Mar-18 18.50 18.25 0.00
5-Apr-18 18.60 18.35 0.10
3-May-18 18.50 18.25 0.00

 

Money Market Rates
Current (%) Previous (%)
Open Buy Back (OBB) 18.00 29.50
Overnight (O/N) 19.00 34.50
FX Market
Current (N/$) Previous ( N/$)
Interbank 305.85 305.80
CBN SMIS 320.00 320.00
I&E FX Window 365.86 361.67
Parallel Market 365.50 366.00
Primary Market Auction Results
NTB  – 21 June 2017
Tenor Rate (%) Offer (NBn) Sub (N’bn) Sale (N’bn)
91 days
182 days
364 days
FGN Bonds – 21 June 2017
Tenor Rate (%) Offer (NBn) Sub (N’bn) Sale (N’bn)
21-Jun 16.1900 40.00 12.52 4.22
27-Mar 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)
170 day 18.00 5.00 1.32 1.32
345 day 18.60 10.00 12.44 10.00

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