Offshore Sellers Move Bond Yields higher ahead of CBN MPC Meeting

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Culled—Proshare

18/5/2018/Zedcrest Capital

***Pension fund Assets rise to N7.94tn as at March 2018***

Proshare Nigeria Pvt. Ltd.

Bonds

The Bond market traded on a bearish note with yields rising higher by c.8bps due to continued offshore sell especially on the 10– and 20-year bonds. Whilst noting the relatively weak demand for bonds by locals and the continued bearishness from offshore, we expect the market to be relatively stable in the coming week, as some local client demand is expected to gradually flow into the market. Market players would also be carefully monitoring proceedings at the MPC meeting of the CBN scheduled for Monday and Tuesday. Our expectations are that the benchmark rate would be retained at 14%.

Proshare Nigeria Pvt. Ltd.

Treasury Bills

The T-bills market traded on a relatively quiet note, with yields compressing slightly by c.5bps on average. This was following the relative ease in system liquidity from the net OMO repayments into the system in the previous session. We expect yields to remain relatively stable, with no significant squeeze in system liquidity expected in the near term.

Proshare Nigeria Pvt. Ltd.

Money Market

The OBB and OVN rates fell to 7.83% and 9.00% respectively, as system liquidity remained relatively stable at c.N100bn positive. We expect rates to inch slightly higher on Monday, due to expected outflows for Wholesale FX sales.

Proshare Nigeria Pvt. Ltd.

FX Market

The Interbank rate remained stable at its previous rate of N305.85/$, with the CBN’s External reserves recovering slightly by 0.02% to $47.79bn. The NAFEX rate appreciated by 0.10% to N360.85/$. Rates in the Unofficial market however depreciated further by 0.17% to N363.00/$.

Proshare Nigeria Pvt. Ltd.

Eurobonds:

The NGERIA Sovereigns traded on a relatively flat note, with yields inching slightly higher by c.1bp on average. The 32s and 30s were the most traded and lost about –0.10pt on average.

The NGERIA corps were slightly bearish across all traded tickers except for the Access 2021s sub. which gained about 0.20pt and was last traded at 102.00.  The FBNNL 21s recorded the highest losses as it dropped by about 1.00pt, down to 98.00.

Proshare Nigeria Pvt. Ltd.

 

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