Investors Remain Bullish on FGN Bonds Ahead of Elections

February 22, 2019/Zedcrest

***Access Bank to Raise N15 Billion via Green Bond***


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 $42.62bn As at February 19, 2019. A c.0.16% decrease from $42.69bn on February 18, 2019
Brent Crude $66.83pb As at February 21, 2019. A c.0.51% decrease from $67.17pb on February 20, 2019


The Bond market traded on a bullish note, as market players continued to pick on offers, mostly on the 2028 bond, which has now rallied by c.28bps from its auction clearing levels to 14.65% at the close of today’s session. Yields consequently closed the day lower by c.10bps on the day, with some demand also witnessed on the 2022s (-23bps) and 2024s (-22bps).

We expect this bullish trend to be sustained barring any significant upheavals at the forthcoming elections.

Benchmark FGN Bonds
Description Bid (%) Offer (%) Day Change (%)
14.50 15-Jul-21 15.02 14.76 0.00
16.39 27-Jan-22 14.77 14.47 (0.23)
14.20 14-Mar-24 14.48 14.29 (0.22)
12.50 22-Jan-26 14.73 14.49 (0.03)
16.29 17-Mar-27 14.79 14.51 (0.04)
13.98 23-Feb-28 14.75 14.65 (0.14)
12.15 18-Jul-34 14.52 14.25 (0.10)
12.40 18-Mar-36 14.57 14.07 (0.05)
16.2499 18-Apr-37 14.44 14.19 (0.07)

Source: Zedcrest Dealing Desk

Treasury Bills

Despite the relative illiquidity in the money market, the T-bills market remained slightly bullish, with yields compressing by c.10bps as market players sustained demand for T-bills following the significant amount of lost bids at the previous day’s auction.

We expect the buying pressures to persist, given the paucity of offers especially on the long end of the curve.

Treasury Bills
Description Bid (%) Offer (%) Day Change (%)
14-Mar-19 9.00 7.00 (1.00)
4-Apr-19 11.00 10.00 (1.00)
2-May-19 12.25 10.80 0.25
13-Jun-19 12.05 10.50 0.10
18-Jul-19 12.50 12.30 (0.15)
1-Aug-19 12.70 12.35 (0.30)
12-Sep-19 14.00 13.90 (0.10)
3-Oct-19 14.50 14.30 (0.20)
14-Nov-19 14.90 14.70 0.00
5-Dec-19 14.85 14.75 (0.10)
2-Jan-20 14.90 14.80 (0.05)

Source: Zedcrest Dealing Desk

Money Market

Rates in the money market trended higher by c.6pct, due to the liquidity squeeze from the significant OMO Sale in the previous session.

We expect rates to remain elevated opening the new week, with the CBN expected to resume its weekly wholesale FX interventions.

Money Market Rates
  Current (%) Previous (%)
Open Buy Back (OBB) 18.83 13.67
Overnight (O/N) 20.25 14.58

Source: FMDQ, Zedcrest Research

FX Market

At the Interbank, the Naira/USD rate remained stable at N306.80/$(Spot) and N356.97/$(SMIS). The NAFEX rate in the I&E window remained relatively unchanged at N361.49/$. At the parallel market, the cash and transfer rates remained stable at N358.20/$ and N366.00/$ respectively.

FX Market
  Current (N/$) Previous ( N/$)
CBN Spot 306.80 306.80
CBN SMIS 356.97 356.97
I&E FX Window 361.48 362.04
Cash Market 358.20 358.30
Transfer Market 366.00 365.50



The NGERIA Sovereigns retreated slightly in today’s session, with yields slightly higher by c.2bps on the day. This was following some profit taking mostly on the 2032s and 2038s. The 2049s however remained well bid during the session.

In the NGERIA Corps, we witnessed slight sell on the FIDBAN 22s.

Proshare Nigeria Pvt. Ltd.


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