Daily performance of major economic indicators and highlights from tradings sessions and key statistics such as Treasury Bills, bonds, FX rates, inflation, oil price.

PMA Rates Clear Higher Amid Tighter System Liquidity.

Senate Approves Issuance of $2.786bn Eurobond for 2018 Budget Funding

KEY INDICATORS

Bonds

The bond market remained scantily traded in today’s session with slight sell pressures witnessed on the shorter end of the curve (24s mostly). Yields were consequently higher by c.6bps as buying interests remained largely absent for the third consecutive session.

We expect this trend to persist, as market players are expected to stay cautious in anticipation of the forthcoming bond auction, where demand is expected to be weaker compared to the previous auction.

Treasury Bills

Yields in the T-bills market inched marginally higher by c.5bps, amid a sustained tightening of system lqiudity, which opened the day in negative territory. Market players also stayed on the sidelines for most of the trading session, in anticpation of results of the PMA.

Of the total amount of c.N147.64bn on offer, the DMO recorded total subscriptions of c.N204bn and was cosequently able to raise the total amount offered. In line with our expectations, rates cleared above their previous levels, with the most uptick recorded on the 182-day (+59bps) at 12.69%, while the 91 and 364-day cleared at 10.96% (+6bps) and 13.449% (+12bps) respectively.

We expect the market to remain slightly bearish tomorrow, as the CBN is expected to float an OMO auction in lieu of the c.N347bn OMO maturities.

Money Market

In line with our expectations, the OBB and OVN rates, remained slightly above the 20% mark, closing today at 22.67% and 24.79%, as system liquidity dipped into negative territory opening the day.

We expect rates to dip slightly tomorrow, due to anticipated inflows from OMO maturities. This is however barring a significant OMO sale by the CBN.

FX Market

At the Interbank, the Naira/USD rate remained stable at N306.50/$ (spot) and N362.52/$ (SMIS). At the I&E FX window a total of $317.11mn was traded in 272 deals, with rates ranging between N358.00/$ – N365.00/$. The NAFEX closing rate appreciated by c.0.10% to N363.96/$ from N364.33/$ previously.

At the parallel market, the cash rate appreciated by 10k to N360.10/$ while the transfer rates remained unchanged at N363.50/$.

Eurobonds

The NGERIA sovereigns reversed some of its recent gains in today’s session, as news of approval of a c.$2.8bn Eurobond issuance by the Nigerian Senate filtered into the market. Yields were higher by c.5bps, with the most losses seen on the 20-yr (2038) which lost c.0.50pct on the day.

Demand for the NGERIA Corps remained relatively muted, except for continued interest on the DIAMBK 19s and late bids seen on the SEPLLN 23s.


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 research 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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