Daily performance of major economic indicators and highlights from trading sessions and key statistics such as Treasury Bills, bonds, FX rates, inflation, oil price.
Market Players Anticipate Slightly Higher Rates at N115bn FGN Bond Auction Tomorrow
Oil suffers biggest one-day drop in over 3 months
KEY INDICATORS
Bonds
The bond market traded flat, with only few trades seen on some mid tenured maturities as market players maintained a slightly short bias ahead of the auction tomorrow.
The DMO will offer 115bn of the 5-yr (35bn), 7-yr (35bn) and 10-yr (45bn) bonds at an auction tomorrow. We expect demand at the auction to be moderate, and not as aggressive as that seen at the previous auction. We consequently expect rates to clear slightly above their previous auction levels across the tenors on offer.
Treasury Bills
The T-bills market reversed gains today, as a squeeze in system liquidty from the wholesale SMIS in the previous session took yields higher by c.15bps across the curve, with the most selloff seen on the shorter end of the curve.
We expect yields to remain elevated tomorrow, as market players anticipate a further OMO auction by the CBN on Thursday to mop up inflows from c.N284bn maturing OMO bills.
Money Market
The OBB and OVN rates moderated slightly by c.5pct to 15.00% and 15.79% as at close of trading today, while system liquidity compressed significantly to c.N38bn from c.N109bn previously, owing to outflows for the Wholesale SMIS which was funded in the previous session.
We expect rates to remain elevated tomorrow, as there are no significant inflows expected.
FX Market
At the Interbank, the Naira/USD rate remained stable N306.55/$ (spot) and N362.52/$ (SMIS). At the I&E FX window a total of $192.03mn was traded in 236 deals, with rates ranging between N358.00/$ – N365.00/$. The NAFEX closing rate appreciated slightly by c.0.04% to N363.94/$ from N364.09/$ previously.
At the parallel market, the cash rate and transfer rates remained stable at N361.00/$ and N364.00/$ respectively.
Eurobonds
The NGERIA Sovereigns remained bearish in today’s session, with selloffs seen mostly on the longer tenured bonds. Yields rose by c.6bps across the curve, with the Nov 2047 bond now above the 8.50% mark at 8.54%.
The NGERIA Corps were mostly flat, except for slight interests seen on the Access 21s sub and FBNNL 21s and some sell on the DIAMBK 19s.
Disclaimer:
Whilst proper and reasonable care has been taken in the preparation and accuracy of the facts and figures presented in this report, no responsibility or liability is accepted by Zedcrest Capital or its employees for any error, omission or opinion expressed herein. This report is not an investment research or a research recommendation and should not be regarded as such. The information provided herein is by no means intended to provide a sufficient basis on which to make an investment decision.
