DAILY MARKET REPORT: FIXED INCOME, MONEY MARKET AND FX – JUNE 22 2017

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News Update:

The World Bank has approved two Program-for-Results operations totaling $961 million to support the Nigerian federal and state authorities in their effort to foster inclusion and revive growth, in alignment with the Economic Recovery and Growth Plan (ERGP) of the Federal Government of Nigeria for 2017–2020.

Source: Leadership

We expect demand to continue to filter into the market as average bond yields remain above the 16.00% mark.”The bond market opened today on a bullish note on the back of the ag- gressive stop rates at the auction yesterday. The on-the-run 5yr and 10yr bonds (2021 and 2027 maturities) witnessed more patronage from market players with yields declining by 9bps from opening levels. Other bond maturities declined by an average of 5bps across the entire yield curve.

The Treasury Bills market was largely bearish as counterparties sold off their holdings in T-bills to create liquidity to fund their obligations. The floatation of a N45billion OMO for settlement same day further supported a sell-off in the market with special emphasis on short term T-bills. The naira liquidity conditions of Money Market will continue to dictate the yield direction in the T-bills market in the near term. Client orders will be filled mostly from auctions.

The OBB and O/N rates further declined to 8.50% and 9.80% as market liquidity improved due to inflows from maturing OMO T-bills (153bn) by the CBN. We expect the rates to close the week on a higher note as the CBN continues to mop-up liquidity via its daily OMO auctions.”

ECONOMIC INDICATORS
Inflation (YoY) 16.25%
Exchange Rate ($) N305.85
MPR 14.00%
Foreign Reserves $30.21Bn
Brent Crude $45.62

 

FGN Bonds
Description Bid (%) Offer (%) Day Change (%)
16.00 29-Jun-19 16.59 16.52 (0.02)
15.54 13-Feb-20 16.42 16.35 (0.02)
14.50 15-Jul-21 16.32 16.25 (0.09)
16.39 27-Jan-22 16.21 16.14 (0.02)
14.20 14-Mar-24 15.92 15.85 (0.04)
12.50 22-Jan-26 16.12 16.05 (0.07)
12.50 22-Jan-27 16.24 16.17 0.08
12.15 18-Jul-34 16.01 15.94 (0.05)
12.40 18-Mar-36 16.00 15.93 (0.07)
FGN Treasury Bills
Description Bid (%) Offer (%) Day Change (%)
3-Aug-17 19.00 18.75 0.50
14-Sep-17 15.35 15.10 0.10
5-Oct-17 19.30 19.05 0.40
2-Nov-17 19.15 18.90 0.20
4-Jan-18 18.95 18.70 (0.05)
1-Feb-18 18.70 18.45 0.00
1-Mar-18 18.50 18.25 0.00
5-Apr-18 18.60 18.35 0.00
3-May-18 18.50 18.25 0.00

 

Money Market Rates
Current (%) Previous (%)
Open Buy Back (OBB) 8.50 18.00
Overnight (O/N) 9.08 19.00
FX Market
Current (N/$) Previous ( N/$)
Interbank 305.85 305.85
CBN SMIS 320.00 320.00
I&E FX Window 363.00 365.86
Parallel Market 366.00 365.50
  Primary Market Auction  Results
NTB  – 21 June 2017
Tenor Rate (%) Offer (NBn) Sub (N’bn) Sale (N’bn)
91 days 13.50 28.12 28.12 28.12
182 days 17.50 55.12 43.84 43.84
364 days 18.65 50.00 82.25 61.29
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 – 22 June 2017
Tenor Rate (%) Offer (NBn) Sub (N’bn) Sale (N’bn)
168 day 18.00 10.00 0.38 0.38
357 day 18.60 40.00 22.34 22.34

 

Eurobonds
Issuer Description Yield (%) Day Change (%)
FGN 6.38 12-Jul-23 6.04 (0.01)
FGN 7.875 16-Feb-32 7.15 (0.01)
Zenith Bank 6.25 22-Apr-19 6.04 0.12
Diamond Bank 8.75 21-May-19 14.28 0.13
First Bank 6.488 23-Jul-21 11.23 0.25
Ecobank 8.75 14-Aug-21 11.86 0.00
Access Bank 10.50 19-Oct-21 8.37 0.02

Sources: FMDQ, CBN, Bloomberg, Zedcrest research

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