Culled—Proshare
April 11, 2018/Zedcrest Capital
***March CPI Inflation Report to be Released Thursday*** – NBS
KEY INDICATORS
| Inflation | 14.33% | Declined by 0.80% in February from 15.13% in January 2018 |
| MPR | 14.00% | Left unchanged at 14.00% at the MPC meeting 0n 4 April 2018 |
| External Reserves | $46.55billion | Accreted 1.51% as at 4 April from $46.51bn as at 3 April 2018 |
| Brent Crude | $70.37pb | Rose by 2.71% from $68.51pb on 9 April 2018 |
Bonds
The Bond market remained relatively flat in today’s session, with few buys on the 21s and slight sell on the 27s and 37s. Yields consequently stayed flat cross the curve. We expect slight buy interests tomorrow, due to surplus system liquidity and expected position taking by some market players ahead of the March CPI Inflation report which is now to be released on Thursday.
| FGN Bonds | |||
| Description | Bid (%) | Offer (%) | Day Change (%) |
| 16.00 29-Jun-19 | 13.64 | 13.57 | 0.04 |
| 15.54 13-Feb-20 | 13.30 | 13.23 | 0.00 |
| 14.50 15-Jul-21 | 13.58 | 13.51 | (0.04) |
| 16.39 27-Jan-22 | 13.48 | 13.41 | (0.01) |
| 14.20 14-Mar-24 | 13.58 | 13.51 | 0.01 |
| 12.50 22-Jan-26 | 13.69 | 13.62 | 0.01 |
| 16.29 17-Mar-27 | 13.70 | 13.63 | 0.01 |
| 12.15 18-Jul-34 | 13.65 | 13.58 | (0.02) |
| 12.40 18-Mar-36 | 13.58 | 13.51 | 0.00 |
| 16.25 18-Apr-37 | 13.55 | 13.48 | 0.00 |
Source: Zedcrest Dealing Desk
Treasury Bills
The T-bills market traded on a significantly bullish note, with yields compressing by as much as 25bps on average, down to 14.01%. This came on the backdrop of anticipated inflows from retail refunds and lack of an OMO auction by the CBN. We expect this bullish trend to persist, but on a more moderate tone as market players anticipate a significant OMO intervention by the CBN on Thursday, when System liquidity is estimated to hit the N1trn mark as in the previous week.Treasury Bills
| Description | Bid (%) | Offer (%) | Day Change (%) |
| 3-May-18 | 13.35 | 13.20 | (0.65) |
| 14-Jun-18 | 13.40 | 13.25 | (0.60) |
| 5-Jul-18 | 13.40 | 13.25 | (0.10) |
| 2-Aug-18 | 13.60 | 13.45 | (0.30) |
| 13-Sep-18 | 13.35 | 13.20 | (0.35) |
| 4-Oct-18 | 13.30 | 13.15 | (0.25) |
| 1-Nov-18 | 13.85 | 13.70 | (0.15) |
| 3-Jan-19 | 13.40 | 13.25 | 0.00 |
| 14-Feb-19 | 13.30 | 13.15 | 0.00 |
| 14-Mar-19 | 13.30 | 13.15 | 0.00 |
Source: Zedcrest Dealing Desk
Money Market
The OBB and OVN rates fell lower to 2.83% and 3.42% respectively, as system liquidity remained significantly buoyant at c.N550bn positive. Barring a renewed OMO auction sale by the CBN, we expect rates to trend lower, as market players anticipate inflows from retail FX refunds.
| Money Market Rates | ||
| Current (%) | Previous (%) | |
| Open Buy Back (OBB) | 2.83 | 3.33 |
| Overnight (O/N) | 3.42 | 3.50 |
Source: FMDQ, Zedcrest Research
FX Market
The Interbank rate appreciated slightly by 0.02% to N305.55/$, with the CBN’s FX reserves recorded to have improved by 1.51% to $46.55bn as at 4 April. The NAFEX rate depreciated slightly by 0.01% to N360.38/$, while rates in the Unofficial market remained stable at N360.50/$.
| FX Rates | ||
| Current (N/$) | Previous ( N/$) | |
| CBN Spot | 305.55 | 305.60 |
| CBN SMIS | 330.00 | 330.00 |
| I&E FX Window | 360.38 | 360.33 |
| Parallel Market | 360.50 | 360.50 |
Source: CBN, FMDQ, REXEL BDC
Eurobonds
The NGERIA Sovereigns traded on a much calmer note, but with a slightly bearish bias, as yields rose marginally by c.2bps on average, indicating a slowdown in profit taking sentiments from the previous session. Investors were slightly bearish on the 18s, 30s and 32s, whilst the 38s, 23s and 47s were the most traded maturities, mostly unchanged from their previous levels.
The Nigerian banks were mostly bearish, as investors were net sellers of the GRTBNL 18s, ACCESS 21s and the FIDBAN 22s, whilst they were slightly bullish on the ZENITH 19s and 22s.
