Wednesday, December 05, 2018/ 06:23AM / Zedcrest Capital
KEY
INDICATORS
|
Indicator
|
Value
|
Commentary
|
|
Inflation
|
11.26%
|
As at November 21, 2018. A c.2bps down from 11.28% recorded in
|
|
MPR
|
14.00%
|
Left Unchanged for the 12th Consecutive Time at the Nov.
|
|
External Reserves
|
$42.33bn
|
As at December 3, 2018. A c.0.38% increase from $42.17bn on November
|
|
Brent Crude
|
$62.07pb
|
As at December 4, 2018. A c.0.21% increase from $61.94pb on December 3, 2018
|
Bonds
Sentiments in the Bond market
remained bearish, as investors stay risk-off especially on the short-end of the
curve. Higher yields on T-bills continues to lure investors in the interim as
the Fixed Income yield curve remains inverted.
We expect the market to remain
weak as market participants’ price in expected supply from the December FGN
bond auction as well as the DMO plans to issue N100bn 7-year Sukuk Bonds later
this month.
|
Benchmark
|
|||
|
Description
|
Bid (%)
|
Offer (%)
|
Day Change
|
|
15.54 13-Feb-20
|
15.00
|
14.53
|
0.00
|
|
14.50 15-Jul-21
|
15.63
|
15.32
|
0.05
|
|
16.39 27-Jan-22
|
14.93
|
14.53
|
0.00
|
|
14.20 14-Mar-24
|
15.30
|
15.11
|
0.00
|
|
12.50 22-Jan-26
|
15.84
|
15.70
|
0.03
|
|
16.29 17-Mar-27
|
15.84
|
15.71
|
0.01
|
|
13.98 23-Feb-28
|
16.00
|
15.88
|
0.01
|
|
12.15 18-Jul-34
|
15.80
|
15.59
|
0.01
|
|
12.40 18-Mar-36
|
15.80
|
15.65
|
0.03
|
|
16.2499 18-Apr-37
|
15.75
|
15.66
|
(0.01)
|
Source: Zedcrest Dealing
Desk
Treasury Bills
Activity in
secondary market for T-bills continue to take a back seat as the market digest
the daily supply of OMO T-bills issued by the Central Bank of Nigeria (CBN).
Volumes traded remained low, as yields remained largely unchanged across the
NTB curve.
For the
fourth trading session in a row, the CBN sold a total of N94.50bn across three
maturities on offer. The Apex bank made no change once again to the stop rates
on the mid- (191-day) and long-end (324-days) bills at 13.50% and 15.00%
respectively, while there was no sale on the short-end (93-day) maturity
offered.
We
maintain our cautious outlook on T-bills, as expectations for yields to trend
upwards remain due to reduced system liquidity levels and expectations for
continued OMO supply as the week progresses.
|
|
||||
|
Tenor
|
Rate (%)
|
Offer (₦’bn)
|
Sub (₦’bn)
|
Sale (₦’bn)
|
|
93-days
|
Nil
|
50.00
|
Nil
|
Nil
|
|
191-days
|
13.50
|
50.00
|
10.77
|
10.77
|
|
324-days
|
15.00
|
150.00
|
83.73
|
83.73
|
|
|
|||
|
Description
|
Bid (%)
|
Offer (%)
|
Day Change (%)
|
|
3-Jan-19
|
14.00
|
13.20
|
0.00
|
|
14-Feb-19
|
14.00
|
13.75
|
0.00
|
|
14-Mar-19
|
13.30
|
13.00
|
0.00
|
|
4-Apr-19
|
14.00
|
12.85
|
0.00
|
|
2-May-19
|
14.00
|
12.75
|
0.00
|
|
18-Jul-19
|
13.80
|
12.75
|
0.00
|
|
1-Aug-19
|
14.10
|
13.70
|
0.00
|
|
12-Sep-19
|
15.00
|
14.40
|
0.10
|
|
3-Oct-19
|
14.90
|
14.60
|
(0.05)
|
|
14-Nov-19
|
15.00
|
14.50
|
0.05
|
Source:
Zedcrest Dealing Desk
Money
Market
Despite the
CBN’s attempt to stem the excess liquidity via the sale of OMO securities (c.N94.50bn),
money market rates closed slightly higher at 8.67% (from 6.67%) and 9.50% (from
7.67%) for Open Buy-Back (OBB) and overnight (O/N) respectively. System
liquidity is consequently estimated at c.N187bn as at close of business today.
We expect
funding rates to tick slightly higher tomorrow as the CBN is expected to
continue its aggressive liquidity mop up exercise via OMO auctions.
|
Money Market Rates
|
||
|
|
Current (%)
|
Previous (%)
|
|
Open Buy Back (OBB)
|
8.67
|
6.67
|
|
Overnight (O/N)
|
9.50
|
7.67
|
Source: FMDQ, Zedcrest
Research
FX Market
At the Interbank market, the
Naira/USD rate remained unchanged to close at N306.85/$ (spot) and N359.81/$
(SMIS). Value traded at the I&E FX window picked up today with a total
trade turnover of $208.15m traded in 293 deals, with rates ranging between N358.00/$
– N365.65/$. The NAFEX closing rate depreciated by c.0.17% to close at N364.63/$
from N364.00/$ previously.
Rates remained calm at the
parallel markets, with both cash and transfer rates remaining stable to close
at N368.00/$ & N372.00/$ respectively.
|
FX Market
|
||
|
|
Current (N/$)
|
Previous ( N/$)
|
|
CBN Spot
|
306.85
|
306.85
|
|
CBN SMIS
|
359.81
|
359.81
|
|
I&E FX Window
|
364.63
|
364.00
|
|
Cash Market
|
368.00
|
368.00
|
|
Transfer Market
|
372.00
|
372.00
|
Source: CBN, FMDQ, REXEL
BDC
Eurobonds
The NGERIA Sovereign Eurobonds traded
slightly weaker as talks of oil production cuts unsettled the Sub-Saharan
Africa space. Volume of trades increased on the day, as yields ticked higher by
c.7bps on the average across the curve.
The NGERIA Corps continued to enjoy positive
sentiments across some tracked tickers, yields compressed further following
investor demand. The ACCESS 21s Subs and DIAMBK 19s continued lead the market,
as demand interests pushed yields on the papers lower by c36bps and c.251bps
respectively.
Related News
1. Yields Continue
to Rise as CBN Maintains Rates at 3rd Consecutive OMO Auction
2. Bullish Run Reversed as Yield on Long Dated Bills Hit
17.0%
3. Money Market Rate Increased Significantly Last Week As The
Overnight Rate Rose To 17.36%
4. Access Bank Plc Series XX N30billion Commercial Paper
Closes Tomorrow
5. December 2018 FGN Savings Bond Offer for Subscription
6. CBN Sends Hawkish Signals to The Market, Hikes OMO Rate to
YTD Highs
7. Fixed Income Markets Trend Bearish as CBN Hikes OMO Rate
8. Stop Rates Remain Unchanged As The CBN Successfully Rolls Over
Maturing Ntbills
