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Market Update: T-Bills market sustain bull run as CBN holds off on OMO

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.

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NSE records 18.18% decline in banks' market capitalisation

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 May 17th, 2019.

**May 2019 Inflation stood at 11.40% y-o-y, from 11.37% April 2019.

***Driven by Food inflation at 13.79% (from 13.70%), while Core inflation dropped to close at 9.00% (from 9.30%)

Key Indicators

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Bonds: The Bond Market opened the week on a muted note, with some flows witnessed on some short- to mid-dated maturities. Spreads compressed as offers improved across the benchmark bond curve, leaving average yields relatively unchanged at 14.68%.

We expect the market to remain order-driven, as markets stay cautious in the near term ahead of the forthcoming bond auction later this month.

Treasury Bills: Activities in the Treasury Bills commenced on a positive note, as demand remained for short- to mid-dated maturities given the absence of an OMO auction from the CBN despite buoyant system liquidity. Yields across the Benchmark NTB curve compressed by c.2bps on the average.

We expect the market to remain bullish in the near term, barring an OMO auction by the CBN.

Money Market: Money market rates opened the week higher off the back of funding pressures for the weekly FX Wholesale auction as well as FX swaps by the CBN. OBB and OVN rates closed the session at 8.86% and 9.43% respectively, as system liquidity is estimated to close the day at c.N170bn positive.

With the reduction in system liquidity, we expect the rates to remain at elevated for most of the week, with some respite from OMO maturities of c.N89bn expected later in the week.

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FX Market: At the interbank, the Naira/USD rate appreciated by 0.02% to close at N306.95/$ (spot) but remained unchanged at N356.92/$ (SMIS) opening the week. The Naira remained stable at I&E window, to close at N360.50/$.

The cash rate at the parallel market depreciated by 0.25% to close at N360.00/$ while the transfer rate remained unchanged at N362.50/$.

Eurobonds: The NIGERIA Sovereigns saw some positive sentiments return, as US and UK bulls markets paused in the short term. Yields compressed by c.3bps on the average across the sovereign curve, with gains most visible at the short-date papers.

The NIGERIA Corps remained relatively unchanged in quoted prices, however, yield valuations improved across most of the tracked papers.


Contact us: Dealing Desk: 01-6311667 Email: [email protected]

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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 advice 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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Economy & Politics

BREAKING: CBN reduces MPR from 12.5% to 11.5%

The Governor of the CBN has announced the reduction of MPR from 12.5% to 11.5%.

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CBN Vs NESG: Waving the white flag for the benefit of Nigerians, Exchange Rate Unification: CBN devalues official rate to N380/$1, Nigerian banks have written off N1.9 trillion impaired loans in past 4 years, CBN sandbox operations, Stirling Trust Company Limited

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has voted to reduce the Monetary policy rate (MPR) from 12.5% to 11.5%. This was disclosed by Governor, CBN, Godwin Emefiele while reading the communique at the end of the MPC meeting on Tuesday.

The committee retained CRR at 27.5% stating that the recent inflationary pressures is not driven by monetary policies, rather as a result of structural policies.

Highlights of the Committee’s decision

  • Reduce the MPR by 100 basis points from 12.5% to 11.5%
  • Adjust asymmetric corridor from +200/-500 to
  • Retain CRR at 27.5%
  • retain liquidity ratio at 30%

More details shortly …

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Manufacturing

FG moves to clamp down on illegal fertilizer manufacturers and agro-dealers 

It is now forbidden for anyone to go into fertilizer business in Nigeria, without registering with the FISSD.

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Fertilizer Producers hail FG's total ban on NPK fertilizers

The Federal Ministry of Agriculture and Rural Development has disclosed that anyone caught producing or merchandising adulterated fertilizers, under the new lawwill be jailed. 

This disclosure was made via the Ministry’s official Twitter handle, to the general public, and seen by Nairametrics. 

The announcement notifies the general public that the National Fertilizer Quality Control (NFQC) Act 2019, is to make sure that every farmer has good and efficient fertilizer for their farms, to boost farming harvest and output. 

The ministry reiterated that it is forbidden for anyone to go into fertilizer business in Nigeria, without registering with the Farm Inputs Support Services Department (FISSD) of the Federal Ministry of Agriculture and Rural Development. However, anyone caught producing or merchandising adulterated fertilizers will be jailed. 

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This regulation is to address the recurring issues of the effect of substandard fertilizers on farm produceand the market proliferation of adulterated fertilizers in the country, which continues to bedevil farm outputs and harvests in the country. 

Backstory: On the 26th of August, the Permanent Secretary of Agriculture and Rural Development,  Dr. Abdulkadir Mu’azu, reaffirmed the Federal Government’s commitment towards implementing the National Fertilizer Quality Control (NFQC) Act 2019. He ensured that the fertilizer regulatory system is in place, to safeguard the interest of the farmers, as when the regulation is implemented, it will protect farmers from using adulterated fertilizers that are nutrient deficient.  

Why this matters  

This policy is important to safeguard both the interest of the farmers and the members of the public, as the initiative is expected to increase agricultural harvest and productivity, in a bid to make national food security a reality. 

The NFQC Act will safeguard interests of fertilizer enterprises, businesses and agrodealers, as it will create part of the enabling environment for private sector investment in the fertilizer industry, and protect the environment against potential dangers, that may result from market proliferation of adulterated fertilizers and the use of harmful substances in fertilizer. 

The Executive Secretary of FEPSAN, Mr. Gideon Negedu, reiterated that the new National Fertilizer Quality Control Act 2019, is a game-changer for the nation’s agricultural sector and a powerful weapon for the farmers. 

In his view, Prof. Yemi AkinseyeGeorge (SAN), said, “that the Federal Government and relevant stakeholders of the fertilizers industryhave taken the bull by the horn in enacting a robust legal framework for quality control in the country.

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Corporate Press Releases

NSE highlights retail investment opportunities in today’s Nigerian Capital Market

The Exchange in collaboration with the NISL has inaugurated the Retail Investors’ Webinar.

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CEO NSE, NSE lifts suspension on Omatek Ventures’ shares, NSE launches Comic Book to boost financial literacy, NSE goes public with 2.5 billion ordinary shares in unanimous vote by the members, NSE commemorates 2020 International Women’s Day and rings the bell for gender equality, COVID-19: NSE extends time for submission of financial statements, NSE PUBLISHES GUIDANCE TO FACILITATE EFFECTIVE VIRTUAL MEETINGS FOR STAKEHOLDERS AMIDST COVID-19, NSE Hosts First-Ever Digital Closing Gong Ceremony

The Nigerian Stock Exchange (“NSE” or “The Exchange”) has expressed its commitment to redefining and improving investors’ overall experience in the Nigerian capital market, and ensuring that it remains modern, convenient and secure. This was highlighted at the inaugural edition of the Retail Investors’ Webinar hosted by The Exchange in collaboration with the Nigerian International Securities Limited (NISL) on Monday, 21 September 2020. The event, with the theme, Capital Market Investing in a Digital Age, was supported by the Chartered Institute of Stockbrokers (CIS) and the Association of Securities Dealing Houses of Nigeria (ASHON).

Speaking during the webinar, the Chief Executive Officer, NSE, Mr. Oscar N. Onyema, OON said, “Investor participation is central to the growth and sustainable development of any economy. The Exchange is, therefore, committed to facilitating conversations that will expound on the retail investment opportunities available in the capital market and the channels through which they can be accessed.  Today, our determination to develop the market and strengthen investor confidence has birthed a number of technology-driven solutions that allow investors to conveniently trade electronically in an increasing array of product offerings that includes Equities, Bonds, ETFs and other Collective Investment Schemes. We will, therefore, continue to take advantage of the vast opportunities to equip existing and potential investors with the necessary skills to effectively manage and grow the financial resources at their disposal.”

On his part, the Managing Director, Nigerian International Securities Limited (NISL), Mr. Laolu Martins said, “NSE has consistently pioneered far-reaching innovations within the Nigerian capital market, positively driving market integrity, boosting both investor confidence and market participation.” He went on to highlight the efforts of the NISL to create wealth for investors via an appropriate mix of securities using well spelt out market research to help investors meet their financial objectives. In doing so, he provided an analysis of the investment instruments available on NSE including equities, bonds, REITS, Closed-Ended Funds, ETFs, etc.

(READ MORE: Capital market operators call for the suspension of recapitalisation plans)

The event also featured a presentation on the importance of Market Data in making investment decisions by the Head, Market Services, NSE, Mr. Olufemi Balogun. It would be recalled that The Exchange recently released an upgrade to its X-DataPortal. The revamped portal has been designed to serve as a principal source for brokers, fund managers, research analysts, other professionals and non-professional participants like students and investors to get quality real-time and reference data reports for analysis, research and reporting purposes. Mr. Balogun encouraged investors at the webinar to access the information via https://dataportal.nse.com.ng.

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The Exchange has showed its clear determination to ensure that investors have a better understanding and appreciation of investment products offered in the Nigerian capital market in its efforts to become Africa’s preferred Exchange hub. The upswing in market activities in Q2:2020 is a testament to the resilience of the market as a result of concerted efforts of The Exchange. As at the end of August 2020, the NSE All Share Index had recorded an 18.9% increase from its position at the end of March, 2020. In addition, the market also witnessed a growth in the percentage value of equity transactions contributed by retail investors, currently at 29% from the 21.8% recorded in 2018 and 24.72% recorded in 2019.    

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