Culled—Proshare
18/9/2018/Zedcrest Capital
***CBN, BPE sign sale of 12.69bn FG shares in Minting Company***- Vanguard
KEY INDICATORS
| Indicator | Value | Commentary |
| Inflation | 11.23% | As at September14, 2018,9bps up from 11.14% recorded in July 2018. |
| MPR | 14.00% | Next MPC meeting scheduled for September 24 & 25, 2018 |
| External Reserves | $45.07bn | As atSeptember 17, 2018. A c.0.27% decrease from $45.19bnon Sept. 14, 2018 |
| Brent Crude | $78.71pb | As at September18, 2018. A c.0.00% increasefrom$78.71pbon Sept. 17, 2018 |
Bonds
The bond market remained largely order driven, with yields weakening by c.2bps on average, following slight sell on the longer end of the curve.
Market players will remain cautious as they monitor developments at tomorrow’s T-bills PMA. We expect the market to remain largely order driven, with the longer end expected to weaken further in favor of the mid tenured bonds.
| Secondary Market Bonds | |||
| Description | Bid (%) | Offer (%) | Day Change (%) |
| 15.54 13-Feb-20 | 14.44 | 13.92 | (0.01) |
| 14.50 15-Jul-21 | 15.28 | 15.15 | 0.02 |
| 16.39 27-Jan-22 | 15.08 | 14.81 | 0.08 |
| 14.20 14-Mar-24 | 15.10 | 14.99 | 0.03 |
| 12.50 22-Jan-26 | 15.23 | 15.11 | 0.02 |
| 16.29 17-Mar-27 | 15.25 | 15.14 | 0.03 |
| 13.98 23-Feb-28 | 15.30 | 15.22 | 0.00 |
| 12.15 18-Jul-34 | 15.42 | 15.31 | (0.01) |
| 12.40 18-Mar-36 | 15.39 | 15.33 | 0.01 |
| 16.2499 18-Apr-37 | 15.40 | 15.29 | 0.03 |
Source: Zedcrest Dealing Desk
Treasury Bills
Except for the continued interests on the Oct maturities which have now compressed by c.200bps wtd, yields remained relatively unchanged across other tenors as market players stayed on the sidelines in anticipation of a second NTB PMA for the month.
At the PMA tomorrow, we expect rates to inch higher on the 364-day bill from 13.50% previously.
| NTB – 19 September 2018 | |||
| Tenor | Offer (N’bn) | Expected Rate (%) | Previous Rate (%) |
| 91 days | 5.40 | 11.00 – 11.50 | 11.00 |
| 182 days | 8.39 | 12.20 – 12.50 | 12.30 |
| 364 days | 168.36 | 13.50 – 14.00 | 13.50 |
Source: Zedcrest Research
Secondary Market Treasury Bills
| Description | Bid (%) | Offer (%) | Day Change (%) |
| 4-Oct-18 | 12.00 | 11.00 | (1.00) |
| 1-Nov-18 | 13.00 | 12.75 | (0.50) |
| 6-Dec-18 | 13.00 | 12.75 | (0.70) |
| 3-Jan-19 | 13.50 | 13.00 | (0.25) |
| 14-Feb-19 | 13.30 | 13.15 | (0.30) |
| 14-Mar-19 | 13.10 | 12.85 | (0.40) |
| 4-Apr-19 | 13.25 | 12.70 | (0.50) |
| 18-Jul-19 | 13.30 | 12.70 | (0.50) |
| 1-Aug-19 | 13.70 | 13.00 | (0.10) |
Source: Zedcrest Dealing Desk
Money Market
The OBB and OVN rates moderated slightly to close at 9.50% and 10.25% respectively. This came on the back of inflows of c.N41bn from coupon payments on the March 2036 bond. System liquidity which opened the day at c.N253bn is consequently estimated to close at c.N294bn positive.
We expect the rates to remain stable in the interim, as there are no significant outflows anticipated.
| Money Market Rates | ||
| Current (%) | Previous (%) | |
| Open Buy Back (OBB) | 9.50 | 11.83 |
| Overnight (O/N) | 10.25 | 12.67 |
Source: FMDQ, Zedcrest Research
FX Market
The Naira/USD rate remained stable at the interbank, closing at N306.30/$ (Spot) and N359.85/$ (SMIS). At the I&E FX window, a total of $491.37mn was traded in 305deals, with rates ranging between N358.00/$ – N364.75/$. The NAFEX closing rate depreciatedby c.0.10% to N362.93/$ from N362.93/$ previously.
At the parallel market, the cashrates and transfer rates remained unchanged at N359.50/$ and N362.00/$ respectively.
| FX Market | ||
| Current (N/$) | Previous ( N/$) | |
| CBN Spot | 306.30 | 306.30 |
| CBN SMIS | 359.85 | 359.85 |
| I&E FX Window | 363.30 | 362.93 |
| Cash Market | 359.20 | 359.50 |
| Transfer Market | 362.00 | 362.00 |
Source: CBN, FMDQ, REXEL BDC
Eurobonds
The NGERIA Sovereigns weakened further, with yields inching higher by c.7bps on average. We witnessed the most selloff on the Feb 2038s which rose by c.10bps d/d.
The NGERIA Corps were mixed, with slight sell seen on the GRTBNL 18s, ACCESS 21s and FBNNL 21s, while investors showed firm interests on the DIAMBK 19s which gained c.0.30pct on the day.