Culled—Proshare
August 20, 2018/Zedcrest Capital
***Gencos Give Six Conditions to Avoid Operational Shutdown***
KEY INDICATORS
| Indicator | Value | Commentary |
| Inflation | 11.14% | As at August15, 2018,9bps down from 11.23% recorded in June 2018. |
| MPR | 14.00% | Next MPC meeting scheduled for September 24 & 25, 2018 |
| External Reserves | $46.37bn | As atAugust 17, 2018. A c.0.11% decreasefrom 46.42% on August 16 2018 |
| Brent Crude | $72.27pb | As at August 20, 2018. A c.0.81% increase, from$71.69pb (August 17, 2018) |
Bonds
The Bond Market traded on a relatively calm note, with yields retracing by c.6bps from its previous session highs, as market players cherry-picked on offers, mostly on the shorter end of the curve. We however witnessed slight sell on the 2037s toward the close of trading, with trades at 14.96%.
With markets closing for a 2-day break, we expect renewed demand from clients opening Thursday, with market sentiments relatively supported by the buoyant level of system liquidity and the slowdown in offshore selloff, noticeably absent in today’s session.
| Secondary Market Bonds | |||
| Description | Bid (%) | Offer (%) | Day Change (%) |
| 15.54 13-Feb-20 | 13.98 | 13.56 | (0.15) |
| 14.50 15-Jul-21 | 14.46 | 13.69 | (0.24) |
| 16.39 27-Jan-22 | 14.55 | 14.14 | 0.04 |
| 14.20 14-Mar-24 | 14.83 | 14.53 | (0.18) |
| 12.50 22-Jan-26 | 15.04 | 14.83 | (0.02) |
| 16.29 17-Mar-27 | 14.99 | 14.92 | 0.00 |
| 13.98 23-Feb-28 | 14.93 | 14.90 | (0.03) |
| 12.15 18-Jul-34 | 14.99 | 14.74 | 0.00 |
| 12.40 18-Mar-36 | 15.01 | 14.83 | (0.01) |
| 16.2499 18-Apr-37 | 14.96 | 14.68 | 0.01 |
Source: Zedcrest Dealing Desk
Treasury Bills
The T-bills markettraded on a relatively flat note, with most activities focused on the shorter end of the curve, as market demand remained relatively weak despite the significantly buoyant level of system liquidity. Yields consequently compressed marginally by c.2bps on average.
We expect yields to trend slightly higher on Thursday due to the anticipated resumption in OMO auction sales by the CBN.
| Secondary Market Treasury Bills | |||
| Description | Bid (%) | Offer (%) | Day Change (%) |
| 13-Sep-18 | 11.00 | 10.00 | 0.45 |
| 4-Oct-18 | 11.25 | 10.50 | (0.25) |
| 1-Nov-18 | 12.00 | 11.50 | 0.00 |
| 6-Dec-18 | 12.10 | 12.00 | (0.15) |
| 3-Jan-19 | 12.40 | 12.15 | 0.05 |
| 14-Feb-19 | 12.45 | 12.20 | 0.05 |
| 14-Mar-19 | 12.20 | 11.90 | (0.10) |
| 4-Apr-19 | 12.15 | 11.60 | (0.05) |
| 18-Jul-19 | 12.00 | 11.45 | (0.14) |
Source: Zedcrest Dealing Desk
Money Market
The OBB and OVN rates remained at single digit levels, closing today at 8.83% and 9.58% respectively. This was as the buoyant level of system liquidity supported outflows for today’s wholesale FX provisioning of c.N70bn. System liquidity is consequently estimated at c.N400bn as at close of business today.
We expect rates to remain at single digit levels for the rest of the week, with inflows of c.N364bn from OMO maturities expected on Thursday.
| Money Market Rates | ||
| Current (%) | Previous (%) | |
| Open Buy Back (OBB) | 8.83 | 7.33 |
| Overnight (O/N) | 9.58 | 8.33 |
Source: FMDQ, Zedcrest Research
FX Market
The Naira/USD rateremained unchanged at the interbank and I&E FX window, closing at N306.10/$ and N362.50/$ respectively. At the parallel market, the cash and transfer rates also remained unchanged at N359.50/$ and N362.00/$ respectively.
| FX Market | ||
| Current (N/$) | Previous ( N/$) | |
| CBN Spot | 306.10 | 306.10 |
| CBN SMIS | 352.00 | 352.00 |
| I&E FX Window | 362.50 | 362.50 |
| Cash Market | 359.50 | 359.50 |
| Transfer Market | 362.00 | 362.00 |
Source: CBN, FMDQ, REXEL BDC
Eurobonds
We witnessed relatively moderate interests on the NGERIA Sovereigns in today’s session, as yields declined by c.7bps on average. The most interests were on the Jun 2032 and Nov 2047 bonds which gained +0.50pct and +0.60pct respectively.
Trading on the NGERIA Corpswere relatively muted except for slight interests witnessed on the ACCESS 21s Snr, UBANL 22s and FIDBAN 22s.
