FeaturedMarket Update

Fixed Income Market Update: 8th July, 2021

ZOCK CAPITAL AND INVESTMENT LLC MARKET UPDATE AS AT 8TH JULY 2021 

 

Foreign exchange Market

The exchange rate between the naira and the US dollar closed at N411.25/$1 at the Investors and Exporters window.Most participants maintained bids between 396.00and 420.86 per dollar.Naira appreciated against the US dollar on Thursday to close at N411.25/$1. This represents a 0.05% drop when compared to the N411.45/$1 that was recorded on Wednesday, 7th July 2021.The naira maintained stability at the parallel market, as it closed at N503 to a dollar.

Crude oil prices dropped on Thursday evening with Brent Crude closing at $74.08 per barrel, down by 0.05% after rising earlier in the day as Energy Information Administration (EIA) data beats expectations.

Oil prices continue to fall as uncertainty coming from the OPEC+ deadlock and fears of COVID variants spreading fast weighed on the market.

 

 

 

FIXED INCOME SECURITIES  AND MONEY MARKET  UPDATE

Yields on the treasury bills secondary market dipped across the curve increasing by 2 bps to close at 6.77 percent from 6.75 percent on the previous day.
The average yields across short-term and medium-term maturities closed flat at 4.45 %  and 5.58 % .Market experienced a sell off notably  on NTB 28-Apr-22 maturity bill with a yield increase of 53 bps.
On  the flip side, the OMO bills market average yield decreased  across the curve by 5 bps to close at 9.88 % as against the last close of 9.93%.
Investors appetite was more on long-term maturities with the average yield falling by 13 bps, while the average yield across the short-term maturities increased by 2 bps. Yields on 5 bills compressed with the 25-Jan-22 maturity bill recording the highest yield decrease of 53 bps, while yields on 17 bills remained unchanged.

We expect treasury bills  rates  to drop further in coming  months as  investors seek high-yielding securities in the light of the prevailing developments in the markets.  However, players expect rates on Federal Government short-term debt instruments to drop further.

TREASURY BILLS  PRIMARY MARKET AUCTION  (PMA).

 

BENCHMARK SECONDARY MARKET TREASURY BILLS

MONEY MARKET

The Overnight rate increased by 1.25 percent to close at 11.75 % as against the last close of 10.50 %, and the Open Buy Back rate also increased by 1.25 %  to close at 11.25 % compared to 10.00 %  on the previous day. The money rates are likely to remain elevated due to relatively low system liquidity.

PREVIOUS FGN BOND PMA AUCTION RESULT

FGN BOND MARKET YIELD CURVE


In the like manner, FGN bonds secondary market dipped at the belly as the average yield across the medium tenor of the curve increased by 10 bps, while the average yields across short tenor and long tenor of the curve declined by 1 basis point and 2 bps, respectively.
The 18-JUL-2034 maturity bond was the best performer with a decline in yield of 10 bps, while the 26-APR-2029 maturity bond was the worst performer with an increase in yield of 18 bps. The average bond yield across the curve cleared higher by 1 basis point to close at 9.54 % from 9.53 % on the previous day.

FGN SECONDARY MARKET BENCHMARK BOND

MARKET NEWS HEADLINES

CBN Introduces Supervisory Framework for Payment Service Banks

The Central of Nigeria (CBN) has introduced the supervisory framework for payment service banks (PSBs) in the country.In the supervisory framework posted on its website, the banking sector regulator explained that the introduction of the PSBs was to contribute to efforts to enhance access to financial services for the unbanked population of the Nigerian economy.The PSBs are expected to leverage on technology to provide services that would be easily accessed by the unbanked population and those who are in hard-to[1]reach areas of the country.This framework hereby provides a set of regulations that are targeted at streamlining the operations of Payment Service Banks, ensuring transparency in their operations as well as ensuring adequate customer protection. The framework focuses on corporate governance, risks management of the PSBs, and safety of funds to the consumers of the Payment Service Banks’ products.

FG SEEKS CBN FUNDING OF WORKERS’ HOUSING SCHEME

The Office of the Head of Service of the Federation has opened discussion with Central Bank of Nigeria (CBN) to make special intervention in the Federal Housing Loan Board.The intervention is expected to ameliorate the poor financing of the Federal Integrated Staff Housing Programme (FISH).

The Head of Civil Service of the Federation (HoS), Dr Folasade Yemi-Esan, stated this during the commissioning of 18 units of two-bedroom block of flats at Technocrats Estate, Mararaba, and 54 units of block of flats at Solutionist Estate in New Karshi, Nasarawa State for civil servants.She said the move would address the concern of the increasing cost of housing, high interest rate on mortgage finance and the poor funding of the Federal Government Housing Loan Board, which served as primary mortgage institution for the FISH Programme.

PROFIT-TAKING HALTS THREE-DAY GAINS ON NGX

The bears returned to the market yesterday to halt the gain recorded from Monday to Wednesday.The bears were attracted by profit-taking in bellwether counters. Consequently, the Nigerian Exchange (NGX) Limited All-Share Index (ASI) fell 0.08 per cent to close at 38,469.87, while market capitalisation shed N26.7 billion to be at N20 trillion. Although Prestige Assurance Plc led the price losers’ table, profit-taking in Access Bank Plc, United Bank for Africa Plc and Stanbic IBTC Holdings Plc led to the negative close. Specifically, Prestige Assurance Plc led the 16 losers with 10 per cent, trailed by Pharma Deko Plc with 9.7 per cent. University Press Plc went down by 7.8 per cent, just as Coronation Insurance Plc and Mutual Benefits Assurance Plc dipped by 5.0 per cent and 4.6 per cent respectively.NASCON Allied Industries Plc and Access Bank Plc shed 4.1 per cent and 3.1 per cent in that order, while UBA and FCMB Group lost 2.6 per cent and 2.2 per cent. The loss by FCMB Group came despite the announcement by the group that its subsidiary, FCMB Pensions Managers Limited had acquired 60 per cent stake in AIICO Pensions Managers Limited, a subsidiary of AIICO Insurance Plc.

DEBT SERVICING GULPS 98% OF NIGERIA’S 5-MONTH REVENUE

The 2021 budget implementation report stated that the Federal Government spent a total of N1.8 trillion on debt servicing in the first five months of the year, representing about 98 percent of the total revenue generated in the same period. A look at the data reveals that the total aggregate revenue generated by the government.

U.K. ECONOMY GREW LESS THAN EXPECTED AS MANUFACTURING WEAKENED – BLOOMBERG

The U.K. economy grew less than expected as the relaxation of lockdown curbs extended to restaurants, hotels and cinemas.The 0.8% expansion in May followed growth of 2% the month before, which was revised down, the Office for National Statistics said Friday. It reflected small declines in construction and manufacturing output, both of which were expected to continue rapid expansion.

Gross domestic product is now 3.1% below where it was in February 2020, before the pandemic struck. The Bank of England predicts a full return by the end of the year. The boom is creating price pressures and fueling speculation about when the central bank could rein in its stimulus program. However, risks to the outlook abound. Job support programs are being wound down, and Prime Minister Boris Johnson plans to lift all remaining restrictions on July 19, despite the delta variant of coronavirus driving a fresh wave of infections. The worry is that doing so when millions of people are not fully immunized could backfire and force the government to re-impose restrictions.

SOURCE:

DISCLAIMER: This publication is strictly for information purposes only for Zock capital and invest  LLC  and its employees take no responsibility or liability as to the accuracy and completeness of the information.
For further ./enquiries/information on this publication, please contact Research and Economic Intelligence .

 

Analyst: By: Judith Idialu: Zock capital and Investment LLC,
0805 598 0595

 

Comment here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

FeaturedMarket Update

Fixed Income Market Update: 8th July, 2021

ZOCK CAPITAL AND INVESTMENT LLC MARKET UPDATE AS AT 8TH JULY 2021 

 

Foreign exchange Market

The exchange rate between the naira and the US dollar closed at N411.25/$1 at the Investors and Exporters window.Most participants maintained bids between 396.00and 420.86 per dollar.Naira appreciated against the US dollar on Thursday to close at N411.25/$1. This represents a 0.05% drop when compared to the N411.45/$1 that was recorded on Wednesday, 7th July 2021.The naira maintained stability at the parallel market, as it closed at N503 to a dollar.

Crude oil prices dropped on Thursday evening with Brent Crude closing at $74.08 per barrel, down by 0.05% after rising earlier in the day as Energy Information Administration (EIA) data beats expectations.

Oil prices continue to fall as uncertainty coming from the OPEC+ deadlock and fears of COVID variants spreading fast weighed on the market.

 

 

 

FIXED INCOME SECURITIES  AND MONEY MARKET  UPDATE

Yields on the treasury bills secondary market dipped across the curve increasing by 2 bps to close at 6.77 percent from 6.75 percent on the previous day.
The average yields across short-term and medium-term maturities closed flat at 4.45 %  and 5.58 % .Market experienced a sell off notably  on NTB 28-Apr-22 maturity bill with a yield increase of 53 bps.
On  the flip side, the OMO bills market average yield decreased  across the curve by 5 bps to close at 9.88 % as against the last close of 9.93%.
Investors appetite was more on long-term maturities with the average yield falling by 13 bps, while the average yield across the short-term maturities increased by 2 bps. Yields on 5 bills compressed with the 25-Jan-22 maturity bill recording the highest yield decrease of 53 bps, while yields on 17 bills remained unchanged.

We expect treasury bills  rates  to drop further in coming  months as  investors seek high-yielding securities in the light of the prevailing developments in the markets.  However, players expect rates on Federal Government short-term debt instruments to drop further.

TREASURY BILLS  PRIMARY MARKET AUCTION  (PMA).

 

BENCHMARK SECONDARY MARKET TREASURY BILLS

MONEY MARKET

The Overnight rate increased by 1.25 percent to close at 11.75 % as against the last close of 10.50 %, and the Open Buy Back rate also increased by 1.25 %  to close at 11.25 % compared to 10.00 %  on the previous day. The money rates are likely to remain elevated due to relatively low system liquidity.

PREVIOUS FGN BOND PMA AUCTION RESULT

FGN BOND MARKET YIELD CURVE


In the like manner, FGN bonds secondary market dipped at the belly as the average yield across the medium tenor of the curve increased by 10 bps, while the average yields across short tenor and long tenor of the curve declined by 1 basis point and 2 bps, respectively.
The 18-JUL-2034 maturity bond was the best performer with a decline in yield of 10 bps, while the 26-APR-2029 maturity bond was the worst performer with an increase in yield of 18 bps. The average bond yield across the curve cleared higher by 1 basis point to close at 9.54 % from 9.53 % on the previous day.

FGN SECONDARY MARKET BENCHMARK BOND

MARKET NEWS HEADLINES

CBN Introduces Supervisory Framework for Payment Service Banks

The Central of Nigeria (CBN) has introduced the supervisory framework for payment service banks (PSBs) in the country.In the supervisory framework posted on its website, the banking sector regulator explained that the introduction of the PSBs was to contribute to efforts to enhance access to financial services for the unbanked population of the Nigerian economy.The PSBs are expected to leverage on technology to provide services that would be easily accessed by the unbanked population and those who are in hard-to[1]reach areas of the country.This framework hereby provides a set of regulations that are targeted at streamlining the operations of Payment Service Banks, ensuring transparency in their operations as well as ensuring adequate customer protection. The framework focuses on corporate governance, risks management of the PSBs, and safety of funds to the consumers of the Payment Service Banks’ products.

FG SEEKS CBN FUNDING OF WORKERS’ HOUSING SCHEME

The Office of the Head of Service of the Federation has opened discussion with Central Bank of Nigeria (CBN) to make special intervention in the Federal Housing Loan Board.The intervention is expected to ameliorate the poor financing of the Federal Integrated Staff Housing Programme (FISH).

The Head of Civil Service of the Federation (HoS), Dr Folasade Yemi-Esan, stated this during the commissioning of 18 units of two-bedroom block of flats at Technocrats Estate, Mararaba, and 54 units of block of flats at Solutionist Estate in New Karshi, Nasarawa State for civil servants.She said the move would address the concern of the increasing cost of housing, high interest rate on mortgage finance and the poor funding of the Federal Government Housing Loan Board, which served as primary mortgage institution for the FISH Programme.

PROFIT-TAKING HALTS THREE-DAY GAINS ON NGX

The bears returned to the market yesterday to halt the gain recorded from Monday to Wednesday.The bears were attracted by profit-taking in bellwether counters. Consequently, the Nigerian Exchange (NGX) Limited All-Share Index (ASI) fell 0.08 per cent to close at 38,469.87, while market capitalisation shed N26.7 billion to be at N20 trillion. Although Prestige Assurance Plc led the price losers’ table, profit-taking in Access Bank Plc, United Bank for Africa Plc and Stanbic IBTC Holdings Plc led to the negative close. Specifically, Prestige Assurance Plc led the 16 losers with 10 per cent, trailed by Pharma Deko Plc with 9.7 per cent. University Press Plc went down by 7.8 per cent, just as Coronation Insurance Plc and Mutual Benefits Assurance Plc dipped by 5.0 per cent and 4.6 per cent respectively.NASCON Allied Industries Plc and Access Bank Plc shed 4.1 per cent and 3.1 per cent in that order, while UBA and FCMB Group lost 2.6 per cent and 2.2 per cent. The loss by FCMB Group came despite the announcement by the group that its subsidiary, FCMB Pensions Managers Limited had acquired 60 per cent stake in AIICO Pensions Managers Limited, a subsidiary of AIICO Insurance Plc.

DEBT SERVICING GULPS 98% OF NIGERIA’S 5-MONTH REVENUE

The 2021 budget implementation report stated that the Federal Government spent a total of N1.8 trillion on debt servicing in the first five months of the year, representing about 98 percent of the total revenue generated in the same period. A look at the data reveals that the total aggregate revenue generated by the government.

U.K. ECONOMY GREW LESS THAN EXPECTED AS MANUFACTURING WEAKENED – BLOOMBERG

The U.K. economy grew less than expected as the relaxation of lockdown curbs extended to restaurants, hotels and cinemas.The 0.8% expansion in May followed growth of 2% the month before, which was revised down, the Office for National Statistics said Friday. It reflected small declines in construction and manufacturing output, both of which were expected to continue rapid expansion.

Gross domestic product is now 3.1% below where it was in February 2020, before the pandemic struck. The Bank of England predicts a full return by the end of the year. The boom is creating price pressures and fueling speculation about when the central bank could rein in its stimulus program. However, risks to the outlook abound. Job support programs are being wound down, and Prime Minister Boris Johnson plans to lift all remaining restrictions on July 19, despite the delta variant of coronavirus driving a fresh wave of infections. The worry is that doing so when millions of people are not fully immunized could backfire and force the government to re-impose restrictions.

SOURCE:

DISCLAIMER: This publication is strictly for information purposes only for Zock capital and invest  LLC  and its employees take no responsibility or liability as to the accuracy and completeness of the information.
For further ./enquiries/information on this publication, please contact Research and Economic Intelligence .

 

Analyst: By: Judith Idialu: Zock capital and Investment LLC,
0805 598 0595

 

Comment here

This site uses Akismet to reduce spam. Learn how your comment data is processed.