Culled—Proshare

5/4/2018/Zedcrest Capital

***BDCs Task CBN on Rate Harmonization ***

Bonds

The Bond market turned slightly bearish, with some sell, especially on the 34s taking yields higher by c.8bps across the curve. This was following a resumption in OMO by the CBN which stifled any significant investors’ interest in the market. We witnessed some decent two-way on the 2027s which however ended bearish upon release of the OMO result, whilst we witnessed some buy interests on the 2020s, mostly around the 103.50 – 103.60 area. We expect the market to remain relatively stable at these levels in the near term, barring a continued aggressive OMO intervention by the CBN, which could portend for a further uptick in yields and weaker buy sentiments in the market.

Treasury Bills

The T-bills market also turned bearish, with yields reversing significantly on the short and medium end of the curve, following the resumption in OMO by the CBN. The CBN sold a significant sum of c.N748bn of the 5-Jul (91days) and 6-Dec (245 days) bills, with the stop rates cut by 10bps to 12.50% and 13.30% respectively. Barring a continued OMO sale tomorrow, we expect the market to be slightly bullish, as system liquidity remains relatively buoyant at c.N400bn.

Money Market

The OBB and OVN rates inched slightly higher to close at 4.83% and 5.33% due to funding for today’s OMO sale.  We expect rates to remain stable tomorrow, barring a significant OMO sale by the CBN. 

FX Market

The Interbank rate remained stable at its previous rate of N305.60/$, with the CBN’s FX reserves recorded to have improved by 1.51% to $46.26bn. The NAFEX rate fell by 0.02% to N360.45/$. Rates in the Unofficial market however appreciated by 0.11% to N360.60/$ due to increased supply of the green back in that segment of the market. 

Eurobonds

The NGERIA Sovereigns remained slightly bullish, with yields compressing further by c.4bps on average. Traded volumes were however lower, mostly on the 27s and 47s which gained +0.37pt and +0.31pt respectively.

The Nigerian banks were mostly quiet with slight sell on the Zenith and UBANL 22s, whilst the FIDBAN 22s traded flat at around 103.00. The SEPLLN 23s improved further, now trading slightly above par (100.10).