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 20th, 2019.
***IFC Says High Nigerian Borrowing Costs Delay $1 Billion Bonds***
Key Indicators
Bonds: The FGN Bond market remained relatively stable, with yields compressing marginally by c.4bps following some demand mostly on the short end of the curve. We also witnessed slight demand interests on the 28s and 36s during the session, whilst there were better sellers of the 34s.
Despite expectations for renewed supply of bonds at the auction next week, we expect yields to remain relatively stable as moderately dovish sentiments and declining bond yields in developed markets are expected to support demand for higher yields in emerging markets.
Treasury Bills: The T-bills market traded on a relatively flat note despite the inflows from OMO maturities. We witnessed slight demand on the short end (Jul- Sep), whilst there were better sellers on the mid tenors (Feb/Mar). Yields were consequently lower by c.3bps on the day.
We expect the market to remain relatively stable in the near term due to the robust system liquidity levels.
Money Market: Rates in the money market moderated further by c.3bps as inflows from OMO maturities bolstered system liquidity higher. The OBB and OVN rates consequently ended the session at 4.43% and 5.00%, with system liquidity currently estimated at c.N260bn.
We expect rates to close the week on a stable note, as there are significant outflows anticipated.
FX Market: At the interbank, the Naira/USD rate remained stable to close at N306.95/$ (spot) and N356.92/$ (SMIS), whilst the NAFEX rate at the I&E window closed slightly higher at N360.69/$. At the parallel market, the cash and transfer rates closed unchanged at N359.80/$ and N362.50/$ respectively.
Eurobonds: The NIGERIA Sovereigns posted significant gains in today’s session, with most tickers gaining as much as 2.5pct from their previous closing prices. This came on the back of the dovish-leaning amongst major central banks and optimism on the resolution of US-China trade tensions.
[READ MORE: T-Bill Rates Decline Further in Absence of CBN OMO Auction]
Investors’ demands were markedly higher in the NIGERIA corps space, with the most interest on the FIDBAN 22s and ETINL 24s which gained as much as 1pct on the day. This came on the back of anticipated inflows from the announced call on the $400m ACCESS 2021s Subordinated Eurobonds.
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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.