Culled—Proshare
January 4, 2019/Zedcrest Capital
*** Nigeria generates N808bn from VAT in 9 months*** – NBS
KEY INDICATORS
| Indicator | Value | Commentary |
| Inflation | 11.28% | As at December 14, 2018. A c.2bps increase from 11.26% recorded in October 2018 |
| MPR | 14.00% | Left Unchanged for the 12th Consecutive Time at the Nov. 22, 2018 MPC Meeting |
| External Reserves | $43.07bn | As at January 2, 2018. A c.0.07% decrease from $43.12bn on December 31, 2018 |
| Brent Crude | $55.47pb | As at January 3, 2019. A c.0.00% decrease from $55.51pb on January 2, 2018 |
Bonds
The Bond Market compressed marginally by c.3bps in today’s session, following slight interests on the 26s, 27s and 37s. Yields however remained much unchanged on other maturities.
We expect the market to close the week on a relatively quiet note, with an outlook for relatively higher yield levels in the coming week.
| Benchmark FGN Bonds | |||
| Description | Bid (%) | Offer (%) | Day Change (%) |
| 15.54 13-Feb-20 | 15.24 | 14.73 | (0.05) |
| 14.50 15-Jul-21 | 15.73 | 15.43 | 0.01 |
| 16.39 27-Jan-22 | 15.12 | 14.77 | 0.00 |
| 14.20 14-Mar-24 | 15.17 | 14.95 | 0.00 |
| 12.50 22-Jan-26 | 15.68 | 15.63 | (0.07) |
| 16.29 17-Mar-27 | 15.59 | 15.51 | (0.04) |
| 13.98 23-Feb-28 | 15.69 | 15.54 | 0.00 |
| 12.15 18-Jul-34 | 15.64 | 15.40 | (0.01) |
| 12.40 18-Mar-36 | 15.69 | 15.42 | (0.01) |
| 16.2499 18-Apr-37 | 15.49 | 15.38 | (0.08) |
Source: Zedcrest Dealing Desk
Treasury Bills
The T-bills market traded on a bearish note with yields rising by c.12bps on average, following sell pressures on the shorter end of the curve in the wake of the OMO auction (c.425bn) by the CBN.
We expect the market to remain bearish tomorrow, as market players would be looking to provide funding for a retail FX intervention sale by the CBN.
| Treasury Bills | |||
| Description | Bid (%) | Offer (%) | Day Change (%) |
| 14-Feb-19 | 15.50 | 13.00 | 0.00 |
| 14-Mar-19 | 17.00 | 14.50 | 0.00 |
| 4-Apr-19 | 13.50 | 11.00 | 0.00 |
| 2-May-19 | 13.00 | 12.50 | 0.00 |
| 13-Jun-19 | 13.50 | 12.50 | 0.00 |
| 18-Jul-19 | 14.00 | 13.00 | 0.00 |
| 1-Aug-19 | 14.50 | 14.00 | 0.00 |
| 12-Sep-19 | 15.00 | 14.00 | 0.00 |
| 3-Oct-19 | 15.00 | 14.00 | 0.00 |
| 14-Nov-19 | 14.90 | 14.60 | 0.00 |
| 5-Dec-19 | 15.05 | 14.90 | 0.00 |
Source: Zedcrest Dealing Desk
Money Market
Rates in the money market declined by c.4pct, with the OBB and OVN rates closing the day at 14.08% and 14.92%, as inflows from Net OMO and PMA repayments (c.N265bn) bolstered system liquidity to c.N385bn est. from c.N120bn opening the day.
Rates are expected to trend higher tomorrow, as the CBN is expected to debit banks for a retail FX interventions sale which estimated to mop up most of the available system liquidity.
| Money Market Rates | ||
| Current (%) | Previous (%) | |
| Open Buy Back (OBB) | 14.08 | 18.33 |
| Overnight (O/N) | 14.92 | 19.42 |
Source: FMDQ, Zedcrest Research
FX Market
At the Interbank, the Naira/USD rate remained unchanged at N306.95/$ (spot) and N358.13/$ (SMIS), while the NAFEX rate in the I&E window depreciated further by c.0.24% to N365.30/$ from N364.41/$ previously. At the parallel market, the cash rate depreciated slightly by c.0.06% to N359.00/$, while the transfer rate remained unchanged at N364.00/$.
| FX Market | ||
| Current (N/$) | Previous ( N/$) | |
| CBN Spot | 306.95 | 306.95 |
| CBN SMIS | 358.31 | 358.31 |
| I&E FX Window | 365.30 | 364.41 |
| Cash Market | 359.00 | 358.80 |
| Transfer Market | 364.00 | 364.00 |
Source: CBN, FMDQ, REXEL BDC
Eurobonds
The NGERIA Sovereigns were flat except for slight interests seen on the 2047s and 2049s.
In the NGERIA Corps, investors slightly bullish on the DIAMBK 19s, Access 21 and FBNNL 21s, whilst we witnessed slight selloff on the FIDBAN 22s.
