Culled—Proshare
August 29, 2019
By Zedcrest Capital
The NTB auction was oversubscribed by 67%, stop rates cleared c.84bps higher than their previous levels, with the highest increase observed on the 91-day tenor (+140bps).
We expect the market to trade on a relatively mixed note tomorrow, as market players anticipate a renewed OMO auction by the CBN, given the c.N393bn in maturing OMO bills. The short end of the curve should remain slightly bullish, while yields on the long end should remain slightly pressured.
Bonds
The FGN Bond market traded on relatively quiet note, but yields moderated further by c.2bps, owing to slight demand interests still on some short and mid tenured bonds.
We expect yields to remain relatively stable in the near term, barring a significant increase in OMO T-bill stop rates by the CBN.
Benchmark FGN Bonds
| Description | Bid (%) | Offer (%) | Day Change (%) |
| 14.50 15-Jul-21 | 14.16 | 13.69 | 0.00 |
| 16.39 27-Jan-22 | 14.15 | 14.00 | (0.05) |
| 12.75 27-Apr-23 | 14.17 | 13.90 | (0.09) |
| 14.20 14-Mar-24 | 14.04 | 13.66 | (0.03) |
| 13.53 23-Mar-25 | 14.19 | 13.65 | (0.04) |
| 12.50 22-Jan-26 | 14.05 | 13.81 | (0.05) |
| 16.29 17-Mar-27 | 14.19 | 14.04 | (0.06) |
| 13.98 23-Feb-28 | 14.18 | 14.06 | (0.03) |
| 12.15 18-Jul-34 | 14.48 | 14.20 | 0.02 |
| 12.40 18-Mar-36 | 14.54 | 14.21 | 0.05 |
| 16.2499 18-Apr-37 | 14.58 | 14.23 | 0.02 |
| 14.80 26-Apr-49 | 14.53 | 14.45 | (0.02) |
Source: Zedcrest Dealing Desk
Treasury Bills
The T-bills market remained slightly bullish, owing to sustained interests on some short and mid tenured bills. The long end of the curve was however relatively flat, as market players placed bids for higher yields at the NTB auction.
| Benchmark Treasury Bills | |||
| Description | Bid (%) | Offer (%) | Day Change (%) |
| 12-Sep-19 | 13.75 | 12.00 | (0.75) |
| 3-Oct-19 | 13.75 | 12.85 | (0.75) |
| 14-Nov-19 | 13.50 | 11.50 | (0.50) |
| 5-Dec-19 | 13.50 | 12.50 | (0.10) |
| 2-Jan-20 | 13.75 | 13.00 | 0.00 |
| 6-Feb-20 | 14.00 | 13.00 | 0.00 |
| 19-Mar-20 | 13.75 | 13.00 | (0.35) |
| 2-Apr-20 | 13.80 | 12.70 | (0.20) |
| 14-May-20 | 13.80 | 13.05 | 0.00 |
| 04-Jun-20 | 13.80 | 12.70 | 0.00 |
| 02-Jul-20 | 13.80 | 12.70 | 0.05 |
| 13-Aug-20 | 13.75 | 12.10 | 0.15 |
Source: Zedcrest Dealing Desk
Money Market
Rates in the money market remained stable as there were no significant funding pressures in the system. The OBB and OVN rates consequently ended the session at 11.86% and 12.79%, with system liquidity currently estimated at c.N35bn positive.
We expect rates to trend lower tomorrow, due to the expected inflows from OMO T-bill maturities.
| Money Market Rates | ||
| Current (%) | Previous (%) | |
| Open Buy Back (OBB) | 11.86 | 11.43 |
| Overnight (O/N) | 12.79 | 12.36 |
Source: FMDQ, Zedcrest
FX Market
At the interbank, the Naira/USD spot and SMIS rates remained stable at N307.00/$ and N358.04/$. The Naira depreciated at the I&E window by 28k to close at N363.16/$. At the parallel market, the cash and transfer rates remained stable at N359.00/$ and N363.00/$ respectively.
| FX Market | ||
| Current (N/$) | Previous ( N/$) | |
| CBN Spot | 307.00 | 307.00 |
| CBN SMIS | 358.04 | 358.04 |
| I&E FX Window | 363.16 | 362.88 |
| Cash Market | 359.00 | 359.00 |
| Transfer Market | 363.00 | 363.00 |
Source: CBN, FMDQ, REXEL BDC
Eurobonds
The NGERIA Sovereigns traded on a weaker note, with yields rising further by c.5bps on the day.
In the NGERIA corps, we witnessed some buying interest in the ACCESS 21 and UBANL 22, whilst other tickers remained relatively stable on the day.
