Seplat Eurobond Surges amid Uptrend in Oil Prices

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October 4, 2018/Zedcrest Capital

***Nigeria’s foreign reserve still strong*** – CBN


Indicator Value Commentary
Inflation 11.23% As at September14, 2018,9bps up from 11.14% recorded in July 2018.
MPR 14.00% Left Unchanged for the 11th Consecutive Time at the Sept. 25, 2018 MPC Meeting
External Reserves $44.03bn As atOctober2, 2018. A c.0.64% decrease from $44.31bnon Sept. 28, 2018
Brent Crude $86.65pb As at October 3, 2018. A c.2.19% increasefrom$84.79pbon October 2, 2018


The Bond Market remained slightly bullish in today’s session with demand shifting towards the longer end of the curve, where market players bought down the 2034s as low as 15.02%. Other maturities remained scantily traded, with yields compressing marginally by c.3bps on average.

We expect the mild bullish sentiments to persist in the near term due to the sustained interests from local investors in the market. We however note that yields have remained relatively well supported at c.15% on the mid to long end of the curve (27s – 37s). 

Benchmark FGN Bonds
Description Bid (%) Offer (%) Day Change (%)
15.54 13-Feb-20 13.75 13.14 0.12
14.50 15-Jul-21 14.86 14.14 (0.07)
16.39 27-Jan-22 14.41 13.91 (0.06)
14.20 14-Mar-24 14.99 14.71 0.01
12.50 22-Jan-26 14.77 14.65 (0.03)
16.29 17-Mar-27 15.10 15.02 (0.03)
13.98 23-Feb-28 15.10 15.05 (0.01)
12.15 18-Jul-34 15.15 15.08 (0.11)
12.40 18-Mar-36 15.17 14.98 (0.05)
16.2499 18-Apr-37 15.17 15.01 (0.02)

Source: Zedcrest Dealing Desk  

Treasury Bills

The T-bills market was relatively flat for most of the day, with yields just compressing marginally by c.3bps, as market players awaited results from the PMA. We witnessed some late rally however on the 19-Sep maturity following rumour of a significantly strong demand at the auction.

The Demand at the PMA was signifcantly robust, as all tenors with the exception of the 91-day well oversubscribed by market players. Rates consequently trended downwards by c.18bps avg. from their previous auction level, with rates clearing at 10.90%, 12.10% and 13.33% on the 91, 182 and 364-day bills respectively.

We expect yields in the secondary market to trend slightly higher tomorrow, due to expectations for an OMO auction by the CBN. 

NTB PMA Results
Tenor Rate (%) Offer (N’bn) Sub (N’bn) Sale (N’bn)
91 days 10.90 9.52 9.52 9.52
182 days 12.10 17.60 31.44 17.60
364 days 13.33 106.37 397.48 106.37
Benchmark FGN Treasury Bills
Description Bid (%) Offer (%) Day Change (%)
1-Nov-18 12.40 12.00 0.15
6-Dec-18 12.40 12.25 (0.15)
3-Jan-19 12.15 12.00 0.00
14-Feb-19 12.45 12.35 (0.20)
14-Mar-19 12.50 12.35 0.00
4-Apr-19 12.40 11.85 (0.15)
18-Jul-19 13.00 12.40 0.00
1-Aug-19 13.00 12.25 0.00
12-Sep-19 12.90 12.75 (0.40)

Source: Zedcrest Dealing Desk  

Money Market

The OBB and OVN rates declined slightly, closing today at 4.25% and 5.00% respectively, as system liquidity remained significantly robust at c.N400bn positive.

We expect rates to remain stable tomorrow, with inflows from OMO maturities (c.268bn), expected to provide a cushion for any outflows from the expected OMO sale by the CBN.

Money Market Rates
  Current (%) Previous (%)
Open Buy Back (OBB) 4.25 4.83
Overnight (O/N) 5.00 5.58

Source: FMDQ, Zedcrest Research 

FX Market

At the Interbank, the Naira/USD rate remained stable N360.40/$ (spot) and N361.34/$ (SMIS). At the I&E FX window a total of $392.90mn was traded in 401 deals, with rates ranging between N358.00/$ – N365.00/$. The NAFEX closing rate appreciated further by c.0.03% to N363.78/$ from N363.88/$ previously.

At the parallel market, the cash rate appreciated by 30k to N359.50/$, while the transfer rate remained unchanged at N362.00/$.

FX Market
  Current (N/$) Previous ( N/$)
CBN Spot 306.40 306.40
CBN SMIS 361.34 361.34
I&E FX Window 363.78 363.88
Cash Market 359.50 359.80
Transfer Market 362.00 362.00



The NGERIA Sovereignsrecovered some gains in today’s session, with yields trending slightly lower by c.3bps on average. Most gains were seen on the longer end 27s – 47s which gained c.0.50pct in price on the day.

The NGERIA Corpswere mostly quiet, except for further gains seen on the SEPLLN 23s, which gained another c.0.45pct on the day, marking a c.1pct gain in the last two sessions and now trading 101/102, with last trade at 101.25. 

 Proshare Nigeria Pvt. Ltd.

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