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

This report is dated July 1st, 2019.

***Nigeria’s oil exports dropped by 1.6m barrels in May***

Key Indicators

Bonds: The FGN Bond market remained bullish, with yields lower by c.7bps, as market players re-invested their bond maturities. The most interests remained notably on the short to mid-end of the curve, while the long end remained relatively flat.

We expect bond yields to flatten out in the near term, following the resumption in OMO issuance by the CBN.

Treasury Bills: The T-bills market traded on a relatively flat note, as the CBN floated an OMO auction to mop up excess system liquidity from bond maturity inflows into the system. The most demand at the auction (c.N701bn) was focused on the longest tenor offered, which cleared 8bps lower at 12.40% with a total sale of N352bn. The stop rate on the mid-tenor bill ticked higher by 21bps, while the shorter tenor remained unchanged at 11.40%.

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READ FURTHER: Why Emefiele wants banks restricted from access to bonds and treasury bills

We expect yields to trend slightly higher tomorrow, as the CBN is expected to float another OMO auction due to expected FAAC inflows into the system. Barring the aforementioned, yields should maintain a downtrend as market players look to fill lost out bids at the auction.

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Money Market: Rates in the money market trended higher by c.4pct, as the CBN conducted a N400 billion OMO sale to mop up excess system liquidity from the c.N351bn Jun 2019 FGN bond maturity. The OBB and OVN rates consequently ended the session at 8.14% and 8.93%, with system liquidity now estimated at c.N82 billion positive.

We expect rates to trend lower tomorrow, due to expected inflows from FAAC payments. This is, however, barring a further OMO sale by the CBN.

FX Market: At the interbank, the Naira/USD rate remained stable at N306.95/$ (spot) and N357.53/$ (SMIS). The NAFEX rate at the I&E window declined by 13k to N360.57/$, whilst the market turnover fell by 56% to $141m. At the parallel market, the cash and transfer rates closed at N358.60/$ and N362.50/$ respectively.


Eurobonds: The NIGERIA Sovereigns remained firmly bullish in today’s session, with price gains as much as 2pct recorded on the long end of the curve. This came on the back of the truce between the US and China at the G-20 summit.

Demand Interests in the NIGERIA Corps remained firm, with continued demand across most tickers. The Access 21s (+1pct) and ETINL 24s (+0.75pct) were the highest price gainers during the session.

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 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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