Culled—Proshare
February 22, 2018/Zedcrest Capital
**NBS to Publish 2017 GDP Data on Feb.27***
KEY INDICATORS
| Inflation | 15.13% | Declined by 0.24% in January from 15.37% in December 2017 |
| MPR | 14.00% | Left unchanged at 14.00% at the MPC meeting of November 2017 |
| External Reserves | $41.77billion | Accreted 1.70% as at 20 February from $41.73bn as at 19 February 2018 |
| Brent Crude | $64.73pb | Fell by 0.42% from $65.00pb on 20 February 2018 |
Bonds
The bond market traded on a slightly bearish note with yields rising by c.9bs on average. This was as market players sold off some positions in anticipation of slightly higher clearing rates at the bond auction. We expect a slight uptick in bond yields tomorrow, due to the relatively weak demand at the auction which cleared at 13.70% and 13.98% on the 2021 and 2028 bonds respectively.
| Benchmark FGN Bond Yields | |||
| Description | Bid (%) | Offer (%) | Day Change (%) |
| 16.00 29-Jun-19 | 14.02 | 13.95 | 0.08 |
| 15.54 13-Feb-20 | 14.10 | 14.03 | 0.12 |
| 14.50 15-Jul-21 | 13.67 | 13.60 | 0.07 |
| 16.39 27-Jan-22 | 13.61 | 13.54 | 0.03 |
| 14.20 14-Mar-24 | 13.75 | 13.68 | 0.08 |
| 12.50 22-Jan-26 | 13.87 | 13.80 | 0.11 |
| 16.29 17-Mar-27 | 13.86 | 13.79 | 0.05 |
| 12.15 18-Jul-34 | 13.61 | 13.54 | 0.16 |
| 12.40 18-Mar-36 | 13.52 | 13.45 | 0.11 |
| 16.25 18-Apr-37 | 13.50 | 13.43 | 0.05 |
Source: Zedcrest Dealing Desk
| Bond Auction Result | ||||
| Maturity | Rate (%) | Offer (N’bn) | Sub (N’bn) | Sale (N’bn) |
| 14.50 Jul 2021 | 13.70 | 50.00 | 38.89 | 27.18 |
| Feb 2038 | 13.98 | 50.00 | 78.69 | 52.44 |
Treasury Bills
The T-bills market remained largely bullish, with yields declining further by c.15ps on average. We observed significant client interests on the 22-Mar, 19-Apr and 31-Jan bills. The bullish sentiments have been largely driven by the continued hold on OMO issuance by the CBN. Some market players also tried to take positions in anticipation of OMO maturity inflows tomorrow. Barring a resumption in OMO issuance, we expect yields to maintain a downward trend.
| Benchmark Treasury Bills Rates | |||
| Description | Bid (%) | Offer (%) | Day Change (%) |
| 5-Apr-18 | 14.50 | 14.35 | (0.05) |
| 3-May-18 | 14.35 | 14.20 | (0.55) |
| 14-Jun-18 | 14.45 | 14.30 | 0.00 |
| 5-Jul-18 | 14.30 | 14.15 | (0.10) |
| 2-Aug-18 | 14.35 | 13.45 | 0.00 |
| 13-Sep-18 | 14.25 | 14.10 | (0.20) |
| 4-Oct-18 | 14.40 | 14.25 | (0.05) |
| 1-Nov-18 | 14.15 | 14.00 | (0.30) |
| 3-Jan-19 | 13.55 | 13.40 | (0.20) |
| 14-Feb-19 | 13.50 | 13.35 | (0.15) |
Source: Zedcrest Dealing Desk
Money Market
The OBB and OVN rates fell to 12.00% and 13.25% respectively, as system liquidity remains robustly positive at c.N156bn. We expect rates to trend lower tomorrow, due to anticipated inflows from c.N57bn OMO T-bill Maturities. This is however barring a significant OMO sale by the CBN.
| Money Market Rates | ||
| Current (%) | Previous (%) | |
| Open Buy Back (OBB) | 12.00 | 19.33 |
| Overnight (O/N) | 13.25 | 19.92 |
Source: FMDQ, Zedcrest Research
FX Market
The CBN Official spot rate remained stable at its previous day rate of N306.00/$, with its external reserves recorded to have improved by 1.70% to $41.77bn.
The spot rate in the Investors and Exporters’ FX Window depreciated by 0.04% to close at N360.40/$ from N360.25/$ in the previous session.
Rates in the Unofficial market remained stable at its previous rate of N360.80/$.
| FX Rates | ||
| Current (N/$) | Previous ( N/$) | |
| CBN Spot | 306.00 | 306.00 |
| CBN SMIS | 330.00 | 330.00 |
| I&E FX Window | 360.40 | 360.25 |
| Parallel Market | 360.80 | 360.80 |
Source: CBN, FMDQ, REXEL BDC
