|
Indicator |
Value |
Commentary |
|
Inflation |
12.56% |
As at June
2020. A 16bps increase from 12.40% recorded in May 2020 |
|
MPR |
12.50% |
As at the July 20, 2020 MPC Meeting.
Maintained at 12.50% |
|
External
Reserves |
$35.97bp |
As
at Jul 24, 2020. A c.0.06% decrease from $35.99bp on Jul 23, 2020 |
|
Brent
Crude |
$43.37pb |
As
at Jul 28, 2020. A c.1.02% increase from $42.93pb on Jul 27, 2020 |
The FGN bond space started on a quite interesting note as actions from profit-takers gingered slight action especially at the tail of the curve. The day kicked off with better offers for the 2035 and 2050s papers which were matched with available bids in the market. The 2035s opened the day with it trades settling around 8.90% and then gradually increasing to 8.95% levels. By mid-day, we saw trading activities slowed, with more offers shown, and bids becoming less aggressive, making it difficult to close trades while quotes stayed stuck at 9.05%/8.95%.
The
2049s and 2050s weren’t left out in the market actions today with most of its trades
settling around 9.70% levels. Subsequently, yield compressed by an average of
c.6bps D/D across the benchmark curve.
We
expect the market trades to continue in this tides with more actions from
profit-takers especially at the tail of the curve.
|
Benchmark FGN Bonds |
||||
|
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
|
|
16.39 27-Jan-22 |
3.55 |
2.63 |
(0.17) |
|
|
12.75 27-Apr-23 |
3.92 |
3.49 |
(0.09) |
|
|
14.20 14-Mar-24 |
3.96 |
3.41 |
(0.07) |
|
|
13.53 23-Mar-25 |
5.00 |
4.40 |
0.00 |
|
|
12.50 22-Jan-26 |
5.86 |
5.10 |
(0.05) |
|
|
16.29 17-Mar-27 |
7.05 |
6.58 |
(0.04) |
|
|
13.98 23-Feb-28 |
7.24 |
6.70 |
(0.04) |
|
|
14.55 26-Apr-29 |
7.73 |
7.39 |
(0.22) |
|
|
12.15 18-Jul-34 |
9.08 |
8.45 |
0.11 |
|
|
12.40 18-Mar-36 |
9.00 |
8.63 |
(0.03) |
|
|
16.2499 18-Apr-37 |
9.20 |
9.00 |
0.00 |
|
|
14.80 26-Apr-49 |
9.78 |
9.66 |
(0.07) |
|
Treasury Bills
The
OMO bills space continued in its slow tides largely bided with poor offers
making it difficult to seal trades. Most of the market bids were for March-
June bills with no offer to show for trade. The few offers seen were for
December and January bills albeit better than yesterday’s levels but still far
from the bulls expectations who were resisting picking these bills at the mid
of 3% level. Consequently, yields dropped further by an average of c.14bps D/D.
The
NTB space saw a bit of action in retail sizes at the belly of the curve which
settled around 1.90%, however, yields stayed flattish across the NTB curve.
For
tomorrow, we expect the OMO space to coast around these levels except the APEX
intervene with a possible OMO auction to ease the market. While at the NTB
space, we expected a bit of calmness as attention shifts to the PMA auction and
its possible outcomes.
|
Primary Market Auction Expectation |
|||
|
NTB - 29 Jul 2020 |
|
||
|
Tenor |
Offer (N'bn) |
Expected Rate (%) |
Previous Rate (%) |
|
91 days |
49.84 |
1.50-1.80 |
1.8000 |
|
182 days |
54.59 |
1.80-2.00 |
2.0400 |
|
364 days |
161.52 |
3.05-3.35 |
3.3500 |
|
Benchmark OMO Bills |
|||
|
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
|
NGOMO 8/13/2020 |
5.00 |
0.01 |
0.00
|
|
NGOMO 9/3/2020 |
5.50 |
0.01 |
0.00
|
|
NGOMO 10/1/2020 |
5.50 |
0.01 |
(0.50) |
|
NGOMO 11/03/2020 |
6.00 |
0.01 |
0.00
|
|
NGOMO 12/01/2020 |
6.00 |
0.01 |
(0.50) |
|
NGOMO 02/02/2021 |
6.50 |
1.00 |
(0.30) |
|
NGOMOB 0 03/02/21 |
6.80 |
1.00 |
0.00
|
|
NGOMOB 0 03/02/21 |
6.80 |
1.00 |
0.00
|
|
NGOMOB 0 05/11/21 |
6.80 |
1.00 |
0.00
|
|
Benchmark NTBills |
|||
|
Description |
Bid (%) |
Offer (%) |
Day Change (%) |
|
NIGTB 10/1/2020 |
3.00 |
0.01 |
0.00
|
|
NIGTB 11/12/2020 |
3.00 |
0.01 |
0.00
|
|
NIGTB 01/14/2021 |
3.50 |
0.10 |
0.00
|
|
NIGTB 02/11/2021 |
3.50 |
0.10 |
0.00
|
|
NIGTB 04/29/2021 |
3.50 |
0.10 |
0.00
|
|
NIGTB 05/13/21 |
4.00 |
0.10 |
0.00
|
|
NIGTB 06/10/21 |
4.00 |
0.10 |
0.00
|
Money Markets
The
interbank system liquidity stayed adequately buoyant opening the day at
c.N746.01BN although we saw a slight uptick in OBB and OVN rates albeit less
significant with its rates closing at 1.33% and 2.00% respectively.
With
no significant funding need tomorrow, we expect rates to hover around this
level during tomorrow’s trading session.
|
Money
Market Rates |
||
|
|
Current
(%) |
Previous
(%) |
|
Open Buy Back (OBB) |
1.33 |
1.13 |
|
Overnight (O/N) |
2.00 |
1.88 |
FX Market
The FX market stayed very quiet for the most
part of the trading session with rates staying unchanged across the different
market segments except at the IEFX market where the Naira appreciated slightly
by 0.25k closing the day at N389.50/$ albeit banks are still largely bided in
that space.
|
FX
Market |
||
|
Current
(N/$) |
Previous
( N/$) |
|
|
CBN Spot |
381.00 |
381.00 |
|
CBN SMIS |
380.69 |
380.69 |
|
I&E FX Window |
389.50 |
389.25 |
|
Cash Market |
473.00 |
473.00 |
|
Transfer Market |
474.00 |
474.00 |
Eurobonds
The NGERIA Sovereign tickers traded on a discreet note,
although largely bullish across the curve with the market gaining most of its
action on the 2025 paper. We also saw slight interest for few longer-dated
papers although in small sizes as such yields compressed by an average of
c.7bps across the sovereign curve.
The NGERIA Corps tickers traded on a
quiet session also as the only movement seen was on Zenith 2022s and FIDBAN
2022s which strengthened by c.4bps apiece.
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 a piece of 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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