This is the summary of the daily performance of major economic indicators and highlights from trading sessions and key statistics such as Treasury Bills and FGN Bonds.
This report is dated July 22nd.
***FG, Siemens sign agreement to generate 11,000MW by 2023***
Bonds: The FGN Bond market traded on a significantly bullish note, with yields lower by c.20bps on the day, as coupon payments on the FGN 2026 bond further boosted demand interests, whilst market players maintained a firm bullish bias ahead of the CBN’s interest rate decision tomorrow.
We expect yields to remain depressed in tomorrow’s session, with Coupon payment on the FGN 2030 bond expected to further bolster demand interests.
Treasury Bills: The T-bills market remained slightly bullish, with yields lower by c.9bps on the day. Demand interests were however slightly subdued on the back of the squeeze in system liquidity from the Wholesale FX sale by the CBN.
We expect rates to remain relatively stable as market players maintain a cautious trading stance at current low yield levels.
Money Market: Rates in the money market spiked by c.10pct as system liquidity was drained by the c.N75bn wholesale FX sale by the CBN. The OBB and OVN rate consequently ended the session at 19.57% and 21.14%, with system liquidity currently estimated at N5 billion negative.
We expect rates to ease lower tomorrow, as banks gain access to the CBN’s SLF window for their funding needs.
FX Market: At the interbank, the Naira/USD rate fell by 5k to N306.95/$ at the spot market, while the SMIS rate remained unchanged at 357.52/$. The NAFEX closing rate at the I&E window was marginally higher by 2k to N361.48/$, whilst the market turnover dipped by c.60% to $90m. At the parallel market, the cash and transfer rates remained stable at N357.50/$ and N361.50/$ respectively.
READ: P&ID’s Hedge Fund purchase underscores fiscal and monetary risks to Nigeria
Eurobonds: The NIGERIA Sovereigns remained stable, with yields relatively unchanged on the day.
In the NIGERIA Corps, we witnessed sustained demand interests on the ACCESS 2021 and ETINL 2024. A total amount of $450m would be repaid to the FBNNL 2021 bondholders tomorrow, following the call announced on the 17th of June 2019 and effective 23rd July 2019.
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.
