Culled—Proshare

6/6/2018/Zedcrest Capital

*** Nigeria records N2.1trn trade surplus in Q1 2018 ***

Bonds

The bond market traded on a relatively quiet note, with slight interests witnessed on the 2021s and 2027s.  Investors however remained net sellers on the longer end (2036s especially) consequently pushing yields higher by c.2bps on average. We expect yields to remain slightly pressured upwards due to the relatively risk off sentiments in the market.

Treasury Bills

The T-bills market traded on a relatively flat note, as system liquidity remained significantly buoyant at c.N460bn. We witnessed slight demand on the January tenors, with some client demand ahead of the OMO T-bill maturities tomorrow. We expect yields to inch slightly higher, as the CBN is expected to intervene via an OMO auction tomorrow.

Money Market

The OBB and OVN rates declined slightly to 2.83% and 3.33%, on the back of the robust system liquidity. We expect rates to trend slightly higher tomorrow, due to an anticipated OMO Sale by the CBN. We however expect this to be moderated by inflows from the c.N215bn Maturing OMO bills.

FX Market

The Interbank rate appreciated by 0.02% to N305.95/$ from its previous rate of N306.00/$. The I&E FX rate however depreciated by 0.05% to N360.95/$. Rates in the Cash market appreciated further by 70k to a 2-yr high of N360.50/$ on the back the lower sell rate to BDCs by the CBN. Rates in the transfer market however remained stable at N364.00/$.

Eurobonds:

The NGERIA Sovereigns remained bearish with yields trending higher by c.5bps. We witnessed the most selloff on the 2047s which lost -75pt, now at 7.91% bid.

The NGERIA Corps were also bearish, with the most sell on the FBNNL 21s and FIDBAN 22s, which lost –0.20pt and –0.60pt respectively. The Access 21s however posted marginal gains of c.+0.10pt.