Culled—Proshare
November 14, 2018/Zedcrest Capital
***No Money, No Unemployment Data, Nigeria’s Head Statistician Says***
KEY INDICATORS
| Indicator | Value | Commentary |
| Inflation | 11.28% | As at October 16, 2018, 5bps up from 11.23% recorded in August 2018. |
| MPR | 14.00% | Left Unchanged for the 11th Consecutive Time at the Sept. 25, 2018 MPC Meeting |
| External Reserves | $41.69bn | As at November 12, 2018. A c.0.10% decrease from $41.73bn on November 9, 2018 |
| Brent Crude | $67.37pb | As at November 13, 2018. A c.5.18% decrease from $71.05pb on November 12, 2018 |
Bonds
The bond market traded relatively flat on the day, with yields marginally higher by c.3bps on the day. We witnessed slight interests around the mid tenors following the spike in yields in the previous session.
We expect sentiments to remain dampened, as market players remain wary of upward yields pressures ahead of the bond auction next week.
| Benchmark FGN Bonds | |||
| Description | Bid (%) | Offer (%) | Day Change (%) |
| 15.54 13-Feb-20 | 14.93 | 14.12 | 0.09 |
| 14.50 15-Jul-21 | 15.56 | 15.15 | 0.14 |
| 16.39 27-Jan-22 | 15.14 | 14.38 | 0.02 |
| 14.20 14-Mar-24 | 15.28 | 15.11 | (0.03) |
| 12.50 22-Jan-26 | 15.69 | 15.48 | 0.08 |
| 16.29 17-Mar-27 | 15.69 | 15.59 | (0.06) |
| 13.98 23-Feb-28 | 16.00 | 15.84 | 0.01 |
| 12.15 18-Jul-34 | 16.00 | 15.79 | 0.11 |
| 12.40 18-Mar-36 | 15.71 | 15.51 | 0.00 |
| 16.2499 18-Apr-37 | 15.59 | 15.48 | (0.05) |
Source: Zedcrest Dealing Desk
Treasury Bills
The T-bills market was slightly bearish in today’s session, with yields trending higher by c.13bps on average. This was following slight selloff mostly on the Dec – Mar maturities as market players trimmed positions in anticipation of the Primary Market Auction tomorrow.
At the PMA tomorrow, we expect yields to clear slightly above their previous levels due to the continued pressure on yields from the frequent OMO auctions by the CBN.
| NTB PMA Expectation – 14 November 2018 | |||
| Tenor | Offer (N’bn) | Expected Rate (%) | Previous Rate (%) |
| 91 days | 3.38 | 10.90 – 11.10 | 10.98 |
| 182 days | 16.92 | 13.35 – 13.60 | 13.49 |
| 364 days | 107.94 | 14.35 – 14.60 | 14.40 |
Source: Zedcrest Research
| Benchmark FGN Treasury Bills | |||
| Description | Bid (%) | Offer (%) | Day Change (%) |
| 6-Dec-18 | 12.80 | 12.25 | 0.55 |
| 3-Jan-19 | 12.85 | 12.50 | 0.05 |
| 14-Feb-19 | 12.80 | 12.50 | 0.10 |
| 14-Mar-19 | 13.00 | 12.60 | 0.00 |
| 4-Apr-19 | 13.00 | 12.50 | 0.00 |
| 18-Jul-19 | 13.00 | 12.70 | 0.00 |
| 1-Aug-19 | 13.45 | 13.15 | (0.25) |
| 12-Sep-19 | 14.50 | 14.30 | 0.05 |
| 3-Oct-19 | 14.50 | 14.30 | 0.00 |
Source: Zedcrest Dealing Desk
Money Market
The OBB and OVN rates remained relatively unchanged from their previous levels, closing today at 5.67% and 6.58%, as system liquidity remained moderately robust at c.N293bn positive.
We expect rates to remain relatively unchanged tomorrow as there are no significant outflows expected.
| Money Market Rates | ||
| Current (%) | Previous (%) | |
| Open Buy Back (OBB) | 5.67 | 6.08 |
| Overnight (O/N) | 6.58 | 7.00 |
Source: FMDQ, Zedcrest Research
FX Market
At the Interbank, the Naira/USD rate remained unchanged at N306.70/$ (spot) and N360.85/$ (SMIS). At the I&E FX window a total of $147.41mn was traded in 303 deals, with rates ranging between N358.00/$ – N365.00/$. The NAFEX closing rate appreciated slightly by c.0.05% to N363.71/$ from N363.89/$ previously.
At the parallel market segment, the cash rate depreciated by 40k to N361.90/$, while the transfer rate remained unchanged at N364.50/$.
| FX Market | ||
| Current (N/$) | Previous ( N/$) | |
| CBN Spot | 306.70 | 306.70 |
| CBN SMIS | 360.85 | 360.85 |
| I&E FX Window | 363.71 | 363.89 |
| Cash Market | 361.90 | 361.50 |
| Transfer Market | 364.50 | 364.50 |
Source: CBN, FMDQ, REXEL BDC
Eurobonds
The NGERIA Sovereigns were softer at the short tenors, but slightly stronger on the longer tenors as market players speculated on the possibility of a non-issuance of a long tenor at the planned FGN Eurobond offering. The 2038s and 2047s consequently gained c.0.35pct on the day, while the rest of the curve was weaker c.0.20pct.
In the NGERIA Corps, we witnessed further strengthening on the DIAMBK 19s (+3pct), with slight interests also on the ZENITH and UBANL 22s.
