Culled—Proshare
March 6, 2019/Zedcrest Capital
***NIRSAL MFB to Provide Funding at 5% Interest to SMEs *** – Emefiele
KEY INDICATORS
| Indicator | Value | Commentary |
| Inflation | 11.37% | As at February 15, 2019. A c.7bps decline from 11.44% recorded in December 2018 |
| MPR | 14.00% | Left Unchanged for the 15th Consecutive Time at the Jan. 22, 2019 MPC Meeting |
| External Reserves | $42.47bn | As at March 5, 2019. A c.0.17% increase from $42.40bn on March 4, 2019 |
| Brent Crude | $65.53pb | As at March 6, 2019. A c.0.21% decrease from $65.67pb on March 5, 2019 |
Bonds
Despite the lesser volumes traded, the market remained slightly bearish, with some profit taking mostly on the 2028s and 2034s. Yields were consequently higher by c.4bps on the day.
We expect the market to remain relatively stable towards weekend, even as demand interests decline ahead of the forthcoming gubernatorial elections.
| Benchmark FGN Bonds | |||
| Description | Bid (%) | Offer (%) | Day Change (%) |
| 14.50 15-Jul-21 | 14.78 | 14.24 | 0.05 |
| 16.39 27-Jan-22 | 14.50 | 14.12 | (0.08) |
| 12.75 27-Apr-23 | 14.66 | 14.21 | 0.00 |
| 14.20 14-Mar-24 | 14.18 | 13.93 | 0.00 |
| 13.53 23-Mar-25 | 14.53 | 14.40 | 0.00 |
| 12.50 22-Jan-26 | 14.32 | 13.99 | 0.01 |
| 16.29 17-Mar-27 | 14.26 | 14.18 | 0.00 |
| 13.98 23-Feb-28 | 14.36 | 14.28 | 0.12 |
| 12.15 18-Jul-34 | 14.25 | 14.10 | 0.18 |
| 12.40 18-Mar-36 | 14.16 | 14.02 | 0.04 |
| 16.2499 18-Apr-37 | 14.16 | 13.98 | 0.07 |
Source: Zedcrest Dealing Desk
Treasury Bills
The T-bills market remained slightly bearish following slight sell off on some short tenor bills. Investors however sustained interests on the longer end of the curve, howbeit, on a softer note.
The CBN held off on conducting an OMO auction in today’s session, but we expect a renewed offering tomorrow due to c.N130bn OMO maturities.
| Benchmark Treasury Bills | |||
| Description | Bid (%) | Offer (%) | Day Change (%) |
| 14-Mar-19 | 11.00 | 8.50 | 1.00 |
| 4-Apr-19 | 12.00 | 10.50 | 1.00 |
| 2-May-19 | 12.00 | 8.50 | 0.50 |
| 13-Jun-19 | 12.00 | 10.50 | 0.20 |
| 18-Jul-19 | 12.75 | 12.25 | 0.25 |
| 1-Aug-19 | 13.00 | 10.00 | 0.00 |
| 12-Sep-19 | 13.50 | 13.35 | (0.05) |
| 3-Oct-19 | 13.65 | 13.25 | 0.05 |
| 14-Nov-19 | 13.70 | 13.40 | (0.05) |
| 5-Dec-19 | 13.70 | 13.25 | (0.05) |
| 2-Jan-20 | 13.60 | 13.20 | (0.05) |
| 6-Feb-20 | 13.60 | 13.05 | 0.10 |
Source: Zedcrest Dealing Desk
Money Market
Rates in the money market were c.1pct lower as system liquidity remained moderately robust at c.N107bn opening the day. The OBB and OVN rates consequently ended the session at 9.33% and 10.42% respectively.
We expect rates to remain relatively stable, barring a significant OMO sale by the CBN.
| Money Market Rates | ||
| Current (%) | Previous (%) | |
| Open Buy Back (OBB) | 8.83 | 9.33 |
| Overnight (O/N) | 9.75 | 10.42 |
Source: FMDQ, Zedcrest Research
FX Market
At the Interbank, the Naira/USD rates remained unchanged at N306.90/$ (Spot) and N356.92/$ (SMIS). The NAFEX rate in the I&E window appreciated further by 0.16% to N360.19/$, with market turnover rising higher to $552m. At the parallel market, the cash rate remained unchanged at N358.00/$ while the transfer rate appreciated by 0.14% to N364.00/$.
| FX Market | ||
| Current (N/$) | Previous ( N/$) | |
| CBN Spot | 306.90 | 306.90 |
| CBN SMIS | 356.92 | 356.92 |
| I&E FX Window | 360.19 | 360.77 |
| Cash Market | 358.00 | 358.00 |
| Transfer Market | 364.00 | 364.50 |
Source: CBN, FMDQ, REXEL BDC
Eurobonds
Sentiments on the NGERIA Sovereigns turned positive in today’s session, with demand witnessed especially on the 25s and 49s. Yields were consequently lower by c.6bps on the day.
In the NGERIA Corps, Investors turned bullish on the ACCESS 21s Snr following shareholder approval of Merger with DIAMBK. The SEPLLN 23s were however slightly bearish following weaker than expected profit figures.
