Culled—Proshare

January 23, 2018/Zedcrest Capital

***IMF Forecasts 2.1% Growth for Nigeria in 2018***

Bonds

The bond market remained weak in today’s session, with most of the trades (c.700m) done on the 2027s bond within a range of 13.42 – 13.47, slightly higher than the traded yield of 13.39% in the previous session. We also witnessed slight sell (totaling c.600m) on the 19s, 22s and 26s, consequently taking yields higher by c.3bps across the curve. We expect the market to trade on a relatively quiet note tomorrow, as market players keenly await the play out from the bond auction.

Treasury Bills

The T-bills market remained bearish, following the continued OMO issuance by the CBN. The CBN sold N410m 26-Apr and N87.42bn 16-Aug bills, with rates maintained at 12.60% and 14.40% respectively. We witnessed slight sell on the April maturities but some buys on the Feb and Oct maturities which had relatively attractive yields. Yields consequently inched higher by c.5bps across the curve. We expect the market to remain scantily traded, as market players are more interested in the medium-term OMO issuances by the CBN, due to their relatively higher yield levels.

Money Market

The OBB and OVN rates declined slightly to 14.67% and 15.50%, even as system liquidity remains tight on the backdrop of the continued OMO issuance by the CBN. We expect rates to remain at current double digit levels, as there are no significant inflows expected into the system.

FX Market

The CBN Official spot rate remained stable at its previous day rate of N305.65/$. Rates at the Investors and exporters FX window appreciated by 0.12% to N360.25/$, while rates at the parallel market stayed flat at N363.00/$.