T-bills

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 July 5th, 2019.

***CBN mandates banks to give 60% of deposits as loans***

Key Indicators

Bonds: Bond yields retraced marginally in today’s session, following a slight breather to the intense demand pressures which followed the bond repayment earlier this week. We however witnessed sustained demand interests around the short to mid-end of the curve, with offers still relatively depressed on those tenors.

We expect the bond market to remain bullish in the medium term, due to the continued moderation in OMO rates by the CBN and the large coupon payments expected later this month.

Treasury Bills: The T-bills market remained bullish, with yields declining by c.11bps on the back of the significantly robust system liquidity levels. The CBN consequently floated an OMO auction in a bid to mop up the excess system liquidity levels, but eventually sold only a total of c.N264bn of the N887bn subscribed at the auction. Rates on the 112 and 266 day bills offered remained unchanged at 11.40% and 11.84%, with all subscriptions met, while the 364-day bill which recorded a 4.96 bid to cover ratio, cleared 15bps lower at 12.25%.

We expect the market to remain bullish, due to the existence of ample system liquidity, occasioned by the lower volume of OMO issuances by the CBN.

Money Market: Rates in the money market inched slightly higher following a c.N264bn OMO sale by the CBN. The OBB and OVN rates consequently ended the session at 4.14% and 4.86%, with system liquidity currently estimated at c.N525bn positive.

We expect rates to trend slightly higher tomorrow, due to funding for the CBN’s bi-weekly retail FX auction.

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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 rose by 15k to N360.76/$, as market turnover dipped by 9% to $294m. At the parallel market, the cash and transfer rates remained stable at N358.60/$ and N362.50/$ respectively.

Eurobonds: The NGERIA Sovereigns remained bullish, with yields lower by c.7bps on the day. Demand interests remained robust on the NGERIA Corps, with continued price gains witnessed across most traded tickers.


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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