Culled—Proshare

March 1, 2018/ Zedcrest Capital

***Nigeria’s ruling party endorses Buhari for second term***

Bonds

The Bond market remained relatively quiet in today’s session, with continued offshore interest on the long end (34s – 37s), compressing yields marginally by c.1bps on average. We expect the market to trade on a bullish note tomorrow, with further yield compression expected on the short and medium end of the curve, as surplus system liquidity and spill over demand from PMA are expected to drive some interests on bonds.

Treasury Bills

The T-bills market also traded on a relatively quiet note, as market players took their demand to the PMA which cleared at c.15bps lower than their previous stop rates. This came as the DMO unexpectedly cut its total offered amount by N130bn, consequently selling only a total of N130bn instead of the N260bn originally offered. The 364-day bill was the most hit, with c.N232bn worth of unsatisfied bids. In absence of a significant OMO auction by the CBN, we expect that these results would fuel some bullish sentiments in the T-bills space tomorrow, due to surplus liquidity from the c.N130bn maturing PMA bills to be repaid and c.N109bn maturing OMO bills.

Money Market

The OBB and OVN rates declined further to 3.75% and 4.50% respectively, as there were no significant outflows from the system. System liquidity is consequently estimated at c.N508bn long. We expect rates to decline further tomorrow, due to expected inflows from Maturing PMA and OMO T-bills estimated at c.N240bn long

FX Market

The CBN Official spot rate remained stable at its previous rate of N305.90/$.

The spot rate in the Investors and Exporters’ FX Window depreciated by 0.07% to close at N360.41/$ from N360.15/$ in the previous session.

Rates in the Unofficial market however remained stable at its previous rate of N361.00/$.