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Debt Securities

Interbank FX rate rises amid slowdown in reserve accretion



FGN Savings Bond

NASS pass 2018 budget, raise spending to N9.1 trillion, oil benchmark to $51 


Inflation 12.48% Declined by 0.86% in April from 13.34% in March 2018
MPR 14.00% Left unchanged at 14.00% at the MPC meeting 0n 4th April 2018
External Reserves $47.79billion Decline by0.10% as at 14 May from $47.84bn as at 11th May 2018
Brent Crude $78.09pb Fell by0.98% from $78.86pb on 11th May 2018



The bond market traded on a relatively quiet note, with yields ticking slightly higher by c.1bp due to slight sell on the 2036s and 2027s towards close of trading. We expect some price recovery in the near term, as the yield premium on inflation is relatively attractive especially to the local institutional clients.

This view would be strengthened by a further moderation in T-bill yields, especially if the CBN decides to relax its current liquidity tightening posture.

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FGN Bonds
Description Bid (%) Offer (%) Day Change (%)
16.00 29-Jun-19 11.45 11.07 (0.01)
15.54 13-Feb-20 13.18 12.61 (0.04)
14.50 15-Jul-21 13.50 13.40 0.02
16.39 27-Jan-22 13.43 13.31 0.04
14.20 14-Mar-24 13.34 13.18 0.01
12.50 22-Jan-26 13.46 13.27 0.03
16.29 17-Mar-27 13.37 13.34 0.01
12.15 18-Jul-34 13.30 13.28 (0.03)
12.40 18-Mar-36 13.32 13.22 (0.01)
16.25 18-Apr-37 13.28 13.24 0.05

Source: Zedcrest Dealing Desk

Treasury Bills

Yields in the T-bills Space moderated further downwards by c.10bps as market players began to price in their OMO auction expectations for tomorrow, with the auction largely expected to clear at +5bps (11.10/12.20) based on prior trends. The PMA auction by the CBN was fairly subscribed, mostly from non-competitive client bids.

The auction stop rates consequently cleared at about 150bps below their secondary market levels. We expect a relatively quiet trading session tomorrow, as market players shift focus to the OMO T-bill auction, which we do not expect to be heavily subscribed due to the liquidity strain in the market.

Treasury Bills
Description Bid (%) Offer (%) Day Change (%)
14-Jun-18 12.50 11.75 0.00
5-Jul-18 13.50 11.75 0.00
2-Aug-18 13.00 12.00 (0.50)
13-Sep-18 13.50 12.50 0.00
4-Oct-18 13.50 12.50 0.00
1-Nov-18 13.00 12.00 0.00
6-Dec-18 12.60 12.35 (0.20)
3-Jan-19 12.65 12.40 (0.05)
14-Feb-19 12.50 11.50 0.00
14-Mar-19 12.50 11.00 0.00
4-Apr-19 12.50 11.00 0.00

Source: Zedcrest Dealing Desk

NTB PMA Result
Tenor Rate (%) Offer (N’bn) Sub (N’bn) Sale (N’bn)
91 days 10.00 3.38 3.71 3.38
182 days 10.50 16.92 20.90 16.92
364 days 10.70 13.54 48.60 13.54

Source: CBN

Money Market

The OBB and OVN rates rose to 23.33% and 24.67%, as system liquidity still remained tight at c.N63bn negative. We expect rates to decline slightly tomorrow on the back of expected inflows OMO T-bill and net PMA repayments (N296bn). This is however baring a significant OMO T-bill sale by the CBN.

Money Market Rates
  Current (%) Previous (%)
Open Buy Back (OBB) 23.33 15.33
Overnight (O/N) 24.67 16.42

Source: FMDQ, Zedcrest Research

FX Market

The Interbank rate depreciated by 0.02% to N305.85/$ from its previous rate of N305.80/$. This was just as the CBN’s external reserves posted a 2-day decretion of $72m down to $47.79bn as at 14-May. The NAFEX closing rate appreciated by 0.23% to N360.77/$, while rates in the Unofficial market remained stable at N362.00/ $.

  FX Rates
  Current (N/$) Previous ( N/$)
CBN Spot 305.85 305.80
CBN SMIS 330.00 330.00
I&E FX Window 360.77 361.61
Parallel Market 362.00 362.00


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The NGERIA Sovereigns remained slightly bearish with yields inching slightly higher by c.3bps on average. The 27s and 47s were the most traded and lost about –0.15pt on average.

The NGERIA Corps were also bearish across all traded tickers except for the ACCESS 21s Snr which posted a marginal gain of +0.10pt. The Zenith 19s and 22s recorded the highest loses of about -0.15pt.

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Debt Securities

United Capital Plc lists N10 billion fixed rate bonds

United Capital Plc has listed its N10bn, 5 Year 12.5% Senior Unsecured Fixed Rate Series I Bonds.



United Capital Asset Management explains mutual funds’ positive performance

Today, September 22, 2020, the Nigerian Stock Exchange (NSE) announced the listing of United Capital Plc’s N10 billion, 5 year senior unsecured fixed-rate series bonds due 2025, with a 12.5% interest.

In a statement made available on the NSE website, and signed by Godstime Iwenekhai, Head, Listings Regulation, the medium-term bond will be issued as part of the N30 billion Debt Issuance Programme.

The subscription for the offer will last for twelve (12) days, as the offer will open on the 4th of May, 2020, and close on the 15th of May, 2020.

READ: UBA Plc H1’2020 results, a true reflection of its rightsizing decision? 

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READ: Some experts are uncertain of what to expect from money markets in H2 2020

Summary of the offer

  • Issuer: United Capital Plc
  • Offer date: 28th of May, 2020
  • Maturity date: 28th of May, 2025.
  • Units of sale: 10,000,000
  • Price: N1000 per units offered
  • Coupon rate: 12.5%

Redemption: Semi-annually, and payable in arrears on 28th November and 28th May of each year, up to and including the Maturity Date.

READ: Savannah Petroleum secures $5 million initial tranche loan

Note: Senior unsecured bonds are a non-convertible corporate bond, that is not subordinated to any other unsecured indebtedness of the related issuer. Hence, it guarantees bondholders a quick payout in cases of default. While a fixed rate bond is a long-term bond, with an already specified coupon rate (Interest).

United Capital Plc, is a leading African financial and investment banking group, providing bespoke value-added service to its client. The firm was incorporated in Nigeria on March 14, 2004.

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Debt Securities

Nigerian Treasury Bill falls to 3.05% per annum

The DMO sold N2 billion on the 91-day paper and N8.385 billion on the 182-day.



Implications of the new CBN stance on treasury bill sale to individuals, Nigerian Treasury Bills Market Witnessed Bullish Run on High Liquidity Last week

The latest data from the Treasury bill auctions concluded today revealed that Nigeria’s 364-day tenor dropped to 3.05%. On the other hand, Stop rates printed lower for the 91-day tenor at 1.09% and 182-day tenor, which went for 1.5%.

At the Treasury bill auction, the Debt Management Office sold N2 billion on the 91-day paper, N8.385 billion on the 182-day, and N148.361 billion on the 364-day bills.

Ladi Bello, a treasury dealer at Nigeria’s Tier 1 bank in a phone chat interview with Nairametrics, spoke on the just-concluded auction.

“At the Primary Market Auction conducted by the DMO yesterday, N159bn was rolled-over across the standard maturities on offer with demand skewed towards the new 1-Yr paper.

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“Stop rates on the short and mid-tenured maturities closed marginally lower than the preceding auction at 1.09% (↓1bps) and 1.50% (↓5bps) respectively, while the 1-Year paper remained unchanged at 3.05%,” Bello said.

Quick facts: The massive disparity between the subscriptions and the offers recorded suggests investors are willing to earn a negative real return, compared to the higher risk in other assets such as stocks and real estate.

Temitope Busari CFA, a leading investment professional in a note to Nairametrics also spoke on the low-interest rates the Federal Government of Nigeria was borrowing with. She said;

“Yesterday’s Treasury bills stop rates were not far off from expectation and yields will likely continue southwards in the near to medium term.

“Additionally, we might see increased pressure on the short-end of the curve due to the dearth of instruments in the market versus excess liquidity.

“Technically, it’s more beneficial for the Government to borrow at the current levels to enhance our chances of recovery post-pandemic recession. Anecdotally speaking, the current interest rate regime is deemed punitive for savers, considering inflation is currently at 13.22%.”

(READ MORE: Nigerian Treasury Bills plunge to 3.39% per annum)

Basically, the CBN sells T-bills on a bi-weekly basis to investors and it is one of the safest investments available. Interests are paid upfront, with the principal paid in full upon maturity.

Understanding Treasury Bills: Basically, when the government goes to the financial market to raise money, it can do it by issuing two types of debt instruments – treasury bills and government bonds.

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Treasury bills are issued when the government needs money for a short period, while bonds are issued when it needs debt for more than, say five years. The issuance of treasury bills is also used as a mechanism to control the circulation of funds in the economy.

Treasury bills have a face value of a certain amount, which is what they are actually worth. However, they are sold for less. For example, a bill may be worth N10,000, but you would buy it for N9,600. Every bill has a specified maturity date, which is when you receive the money back.

The government then pays you the full price of the bill (in this case N10,000), giving you the opportunity to earn N400 from your investment. The amount that you earn is considered as the interest, or your payment for lending your money to the government.

The difference between the value of the bill and the amount you pay for it is called the discount rate and is set as a percentage.

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Nigeria’s total public debt stock increased by N2.381 trillion in 3 months

The Debt Management Office revealed that Nigeria’s debt stock increased by N2.381 trillion.



President Buhari not to blame for increase in debt – DMO DG

Nigeria’s Total Public Debt Stock stood at N31.009 trillion as of June 30, 2020. The disclosure was contained in a press release by the Debt Management Office (DMO), on September 9, 2020.

The data shows that the Total Public Debt Stock which comprises the Debt Stock of the Federal Government, the 36 State Governments, and the Federal Capital Territory, increased by N2.381 trillion within 3 months when compared with the N28.628 trillion recorded on March 31, 2020.

READ: BOOM: Nigeria’s total debt portfolio hits at N27.4 Trillion

The N2.381 trillion increase was accounted for by the $3.36 billion Budget Support Loan from the International Monetary Fund (IMF), New Domestic Borrowing to finance the Revised 2020 Appropriation Act including the issuance of the N162.557 billion Sukuk bond, and Promissory Notes issued to settle Claims of Exporters.

Backstory: It will be recalled that the 2020 Appropriation Act had to be revised due to the adverse impact of COVID-19 on the Government’s revenues, and the increased expenditure needs on health and economic stimulus amongst others.

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READ: Debt Servicing: Nigeria pays $1.12 billion to World Bank, others in 10-month 

What to expect

According to the Debt Management Office, the Public Debt Stock is expected to grow, as the balance of the New Domestic Borrowing is raised, and expected disbursement is made by the World Bank, African Development Bank, and the Islamic Development Bank, which were arranged to finance the 2020 Budget.

Explore Economic and Financial Data on our Nairalytics Website

Additional Promissory Notes are also expected to be issued before the year ends. This and New Borrowings by State Governments are expected to increase the Public Debt Stock.

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