Welcome to Nairametrics‘ summary of the daily performance of major economic indicators and highlights from trading sessions and key statistics such as Treasury Bills and Bonds. This is brought to you by Zedcrest.

This report is dated June 6th, 2019.

CBN Floats A Second OMO Auction This Week, Secondary Market Yields Expand Further In Response.

Key Indicators

Bonds: The Bonds market resumed from the holiday break on a weak note, a yields continued to climb higher. Yields expanded by c.13bps across the benchmark bond curve, as average yields closed at 14.58%. We witnessed bargain hunting by investors at the long-end of the curve, especially 2034 and 2049 maturities.

Bargain hunting should persist as local appetite remains for yields at these levels, we therefore expect a strong close for bonds this week.

Business day

Treasury Bills: Treasury Bills saw continued rise in yields opening today’s session, as the CBN announced a second OMO auction this week. Yields on short-dated maturities accelerated the most as market players sold-off in anticipation of tightened system liquidity levels. Yields across the NTB curve expanded by c.36bps on the average, for the second trading session in a row.

At the OMO auction, the CBN sold a total of N157.98bn across three maturities. The stop rates for the 98-, and 364-day tenors were maitained at 11.40% and 12.48% respectively, while the 175-day closed marginally lower at 11.63%.

Deal book 300 x 250

We expect yields to remain elevated to close the week, as system liquidity faces funding pressures from FX Retail funding tomorrow.

Standard chartered

Money Market: Money market rates remained stable as the CBN promptly mopped up inflows of c.N177bn via OMO maturities with an OMO auction today, selling a total of N157.98bn. The OBB and OVN rates closed at 8.29% and 9.21% respectively.

We expect money market rates to close the week higher, as funding pressures from the CBN FX Retail Bi-weekly auction weigh on system liquidity levels.

FX Market: At the Interbank, the Naira/USD rate remained unchanged at N306.95/$ (spot) and N356.92/$ (SMIS). The Naira also remained stable at the I&E window, with the NAFEX rate unchanged despite a 79% increase in market turnover (to close at $330.61m).

At the parallel market, the cash and transfer rates remained unchanged at N358.80/$ and N362.50/$ respectively.

Eurobonds: The NIGERIA Sovereigns reversed losses from previous trading sessions, as we witnessed demand for papers across the sovereign curve. The most active papers were the NIGERIA 2027, 2047 and 2049 maturities. Yields compressed by c.20bps on the average across the curve.

The NIGERIA Corps continued to receive positive interests from local investors, we witnessed continued interest across most of the tracked tickers especially the FIDBAN 2022 and ETINL 2024 papers which gained +5bps and +3bps respectively.

Contact us: Dealing Desk: 01-6311667 Email: research@zedcrestcapital.com

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.


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