T-bills Market Trades Flat, as CBN Mops up c.N249bn in OMO Sale


11/10/2018/Zedcrest Capital

***Senate, Reps assure Buhari on passage of $2.7bn Eurobond request***


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 $43.43bn As atOctober10, 2018. A c.0.21% decrease from $43.52bnon October9, 2018
Brent Crude $81.31pb As at October 11, 2018. A c.2.49% decreasefrom$83.39pbon October 10, 2018

The bond market traded on a relatively flat note, with only slight interests seen on the 21s and 27s. Yields consequently compressed by c.6bps on average as investors continued to show preference for the short tenors.

We expect the market to close the week on a relatively calm note, as market players look onward towards the inflation data to be released in the coming week, with consensus expectation being for a further uptick in the headline rate.

Benchmark FGN Bonds
Description Bid (%) Offer (%) Day Change (%)
15.54 13-Feb-20 13.92 13.50 (0.05)
14.50 15-Jul-21 14.81 14.58 (0.12)
16.39 27-Jan-22 14.10 13.72 (0.30)
14.20 14-Mar-24 14.99 14.82 (0.02)
12.50 22-Jan-26 14.84 14.77 0.01
16.29 17-Mar-27 15.05 14.97 (0.10)
13.98 23-Feb-28 15.18 15.15 (0.03)
12.15 18-Jul-34 15.21 15.14 0.01
12.40 18-Mar-36 15.20 15.05 0.00
16.2499 18-Apr-37 15.11 14.99 0.00
Source: Zedcrest Dealing Desk

Treasury Bills

The T-bills market was scantily traded in today’s session, with slight selloff seen on the shorter end of the curve (Oct – Feb), as market players repositioned for the OMO auctioned announced by the CBN.

The CBN offered a total of N300bn of the 91-, 182- and 350-day bills to mop up inflows worth c.N277bn in maturing bills. It was however only able to sell a total of c.N249bn of the 182- and 350-day bills, with rates maintaiuned at at 12.50% and 13.50% respectively. There was no sale on the 91-day tenor.

We expect the market to close the week on a slightly bearish note, due to expected outflows for a retail FX auction by the CBN tomorrow.

Benchmark FGN Treasury Bills
Description Bid (%) Offer (%) Day Change (%)
1-Nov-18 13.15 12.90 0.15
6-Dec-18 13.00 12.75 0.25
3-Jan-19 13.00 12.10 0.60
14-Feb-19 12.90 12.60 0.05
14-Mar-19 13.00 12.30 0.00
4-Apr-19 12.35 12.05 0.00
18-Jul-19 13.10 12.50 (0.05)
1-Aug-19 13.00 12.75 (0.20)
12-Sep-19 13.30 13.00 0.05
Source: Zedcrest Dealing Desk

Money Market

The OBB and OVN rates remained relatively stable, closing today at 9.00% and 9.58% respectively, as system liquidity remained supported by inflows from OMO maturities and retail FX refunds. Our estimate for system liquidity is at c.N350bn closing today, having taken into account the outflows for today’s OMO auction.

We expect rates to spike above single digits tomorrow, due to expected outflows for a retail FX auction by the CBN.

Money Market Rates
Current (%) Previous (%)
Open Buy Back (OBB) 9.00 9.67
Overnight (O/N) 9.58 10.17
Source: FMDQ, Zedcrest Research

FX Market

At the Interbank, the Naira/USD rate remained stable at N306.45/$ (spot) and N361.34/$ (SMIS). At the I&E FX window a total of $135.47mn was traded in 399 deals, with rates ranging between N358.00/$ – N365.00/$. The NAFEX closing rate appreciated by 0.07% toN364.02/$ from N364.27/$ previously.

At the parallel market, the cash and transfer rates remained unchanged at N360.00/$ and N363.00/$ respectively.

FX Market
Current (N/$) Previous ( N/$)
CBN Spot 306.45 306.45
CBN SMIS 361.34 361.34
I&E FX Window 364.02 364.27
Cash Market 360.00 360.00
Transfer Market 363.00 363.00


The NGERIA sovereigns remained bearish in today’s session, with yields rising further by c.7bps on average. We witnessed the most sell off on the 2030s which lost c.0.60pct on the day. Yields are now up c.25bps from their levels at the start of the week.

The NGERIA Corps were mostly quiet, except for continued interests on the DIAMBK 19s, -20bps d/d.


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