Culled—Proshare
November 24, 2017/ Zedcrest Capital
Table 1:Key Indicators
| Inflation | 15.91% | Declined by 0.07% in October from 15.98% in September 2017 |
| MPR | 14.00% | Left unchanged at 14.00% at the MPC meeting of November 2017 |
| External Reserves | $34.43billion | Accreted by 2.04% as at 21st November from $34.41bn on 20th November 2017 |
| Brent Crude | $62.80pb | Rose by 0.18% from $62.69pb on 21st November 2017 |
Bonds
The bond market was relatively quiet today, as market players stayed cautious in the absence of any significant client demand. Market activity was however centered on the 2027 bonds, as some profit taking on the bond took its yield slightly above its auction rate to 14.85% (bid). Average bond yields consequently rose by 4bps to 14.65% from 14.61% in the previous session. We expect the market to be relatively quiet tomorrow, barring any renewed profit taking activity by market players.
Table 2:Benchmark FGN Bond Yields | |||
| Description | Bid (%) | Offer (%) | Day Change (%) |
| 16.00 29-Jun-19 | 14.77 | 14.70 | 0.22 |
| 15.54 13-Feb-20 | 14.58 | 14.51 | 0.16 |
| 14.50 15-Jul-21 | 14.83 | 14.76 | 0.06 |
| 16.39 27-Jan-22 | 14.42 | 14.35 | (0.08) |
| 14.20 14-Mar-24 | 14.80 | 14.73 | 0.07 |
| 12.50 22-Jan-26 | 14.75 | 14.68 | 0.02 |
| 16.29 17-Mar-27 | 14.85 | 14.78 | 0.07 |
| 12.15 18-Jul-34 | 14.52 | 14.45 | (0.09) |
| 12.40 18-Mar-36 | 14.55 | 14.48 | 0.00 |
| 16.25 18-Apr-37 | 14.45 | 14.38 | 0.00 |
Source: Zedcrest Dealing Desk
Treasury Bills
The T-bills market was slightly bullish today, with slight buys on the short and medium end of the curve, as market liquidity was bolstered by OMO maturity inflows of c.N200bn. The OMO auction by the CBN was well over subscribed to the tune of N133bn on the 210-day bill offered. The CBN however sold only N2.068bn of the 91-day and N51.96billion of the 210-day bill, as it cut its auction stop rate by another 5bps for the second day in a row, with rates clearing at 15.95% and 17.70% on the two bills respectively. We expect the market to be slightly bullish tomorrow, as market players will look to cover some lost bids from the auction.
| Table 3: Benchmark Treasury Bills Rates | |||
| Description | Bid (%) | Offer (%) | Day Change (%) |
| 7-Dec-17 | 15.60 | 15.35 | (0.40) |
| 4-Jan-18 | 16.55 | 16.30 | 0.35 |
| 1-Feb-18 | 16.80 | 16.55 | (0.20) |
| 1-Mar-18 | 16.00 | 15.75 | (0.35) |
| 5-Apr-18 | 17.00 | 16.75 | 0.05 |
| 3-May-18 | 17.60 | 17.35 | 0.00 |
| 14-Jun-18 | 17.55 | 17.30 | (0.05) |
| 5-Jul-18 | 17.50 | 17.25 | 0.00 |
| 2-Aug-18 | 16.75 | 16.50 | 0.00 |
| 13-Sep-18 | 15.00 | 14.75 | 0.00 |
| 4-Oct-18 | 15.25 | 15.00 | 0.00 |
Source: Zedcrest Dealing Desk
| Table 4: OMO – 23 November 2017 | ||||
| Tenor | Rate (%) | Offer (NBn) | Sub (N’bn) | Sale (N’bn) |
| 91 day | 15.95 | 30.00 | 2.07 | 2.07 |
| 210 day | 17.75 | 70.00 | 133.06 | 51.96 |
Source: CBN
Money Market
The OBB and OVN rates fell significantly to 11.83% and 11.96% from c.28% levels the previous day. This was as a result of the cash inflows from OMO maturities by the CBN. System liquidity is consequently estimated to close today at N27bn positive, from a negative opening figure of N120bn. We expect rates to trend northwards tomorrow, as system liquidity is estimated to get tighter due to expected debits for bond auction settlement and further OMO T-bill sales by the CBN.
| Table 5: Money Market Rates | ||
| Current (%) | Previous (%) | |
| Open Buy Back (OBB) | 11.83 | 27.17 |
| Overnight (O/N) | 11.96 | 29.17 |
Source: FMDQ, Zedcrest Research
FX Market
The CBN Official spot rate appreciated slightly by 0.02% to N305.85/$ from its previous day rate of N305.90/$. Its external reserves is also recorded to have improved by 2.04% to $34.43billion as at 21st of November 2017. Rates at the Investors and exporters FX window closed at N360.27/$ from N360.65/$ in the previous session. Rates at the parallel market also appreciated to N361.80/$ from its previous day rate of N362.10/$.
| Table 6: FX Rates | ||
| Current (N/$) | Previous ( N/$) | |
| CBN Spot | 305.85 | 305.90 |
| CBN SMIS | 330.00 | 330.00 |
| I&E FX Window | 360.27 | 360.65 |
| Parallel Market | 361.80 | 362.10 |
Source: CBN, FMDQ, REXEL BDC
