FeaturedMarket Update

Fixed Income Market Update: Thursday, 15th July, 2021

ZOCK CAPITAL AND INVESTMENT  MARKET UPDATE AS AT 15TH JULY 2021 

Foreign exchange Market

The naira maintained stability against the U.S. dollar at both the official and parallel market segments on Thursday. For the I&E FX market, Naira remained unchanged at 411.20. Most participants maintained bids between 387.67 and 412.30 per dollar. Data posted on the FMDQ Security Exchange where forex is officially traded showed that the local unit closed at N411.20 per $1 at the NAFEX window, the same rate it traded in the previous session on Wednesday.

This occurred as the domestic currency staged an intraday low of N412.50 and a high of N400.00 before closing at N411.20 as of the close of business on Thursday. Forex supply slumped by 42.2 per cent, with $123.69 million recorded at the end of the market session as against the $213.99million recorded in the previous session on Wednesday.

DAILY FOREIGN EXCHANGE RATES (DOLLAR / POUNDS / EURO )

CBN INTERBANK RATES

FIXED INCOME SECURITIES  AND MONEY MARKET  UPDATE

SECONDARY MARKET

The secondary market treasury Bills experienced a bearish sentiment with average yield closing at 7.10 % across the tradable benchmark curve. The 30-Sep-21 maturity bill recorded the highest yield increase of 32bps.
Average yield across the short-term maturities inched by 31 bps, while the average yield across the long term maturities dipped by 1 basis point. However, the average yield across the mid maturities closed flat at 5.93 %.

OMO BILLS

On the flip side, the OMO bills market yield curve remained flat across all maturities. Average yields across short term, mid and long term maturities closed at 8.77 %, 9.48 % and 10.17 percent, respectively.

TREASURY BILLS PRIMARY MARKET AUCTION (PMA).

BENCHMARK SECONDARY MARKET TREASURY BILLS

MONEY MARKET


The Overnight  rate  closed at 7.25 %  as against the last close of 14.50 % and the Open Buy Back  rate decreased by 7.00 % to close at 7.00 % compared to 14.00% on the previous day owing to improved  system liquidity. The major inflows from treasury bills and FGN bonds maturities was  N711.18 billion.

INVEST IN FGN MONTHLY BOND AUCTION FOR JULY 2021
The Central Bank of Nigeria on the authority of The Debt Management Office on behalf of the Federal Government Of Nigeria Offers for Subscription by Auction and is authorized to receive applications for the following;

  • N50,000,000,000 – 13.98% FGN FEB 2028 (10-Yr Re-opening)
  • N50,000,000,000 – 12.40% FGN MAR 2036 (20-Yr Re-opening)
  • N50,000,000,000 – 12.98% FGN MAR 2050 (30-Yr Re-opening)

Auction Date: July 19, 2021
Settlement Date: July 23, 2021
Issuer: Federal Government of Nigeria
Units Of Sale: N1,000 per unit subject to a minimum subscription of N50,001,000 and in multiples of N1,000 .
Interest rate: For Re-openings of previously issued bonds, (where the coupon is already set), successful bidders will pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned, plus accrued interest from the original issue date.
Interest payment: Payable semi-annually
Redemption: Bullet repayment on the maturity date.

PREVIOUS FGN BOND PMA AUCTION RESULT

FGN bonds secondary market was relatively quiet as the average bond yield closed at 9.92 %. Average yield across the short tenor of the curve expanded by 2 bps, while the average yield across medium tenor and long tenor of the curve declined by 2 bps and 7 bps, respectively.

FGN BOND MARKET YIELD CURVE

MARKET NEWS HEADLINES

Naira Gains At Official Window

Bank of canada holds interest rate, says it will curb bond purchases the bank of canada held its key overnight interest rate at a record low 0.25% as expected on wednesday and said it would cut its weekly net purchases of government of canada bonds to a target of c$2 billion ($1.6 billion) from c$3 billion.in a statement, the central bank said it remained committed to keeping the interest rate unchanged until economic slack was absorbed. this is expected to happen some time in the second half of 2022.

Gold bullish over U.S Federal Reserve Chairman’s stance

Gold started the london session today bullish, as U.S. Federal reserve chair, Jerome powell signalled the central bank’s “powerful support” for economic recovery.gold futures is up 0.46%, trading at $1,833.45 an ounce, remaining above the $1,800 mark. the dollar index, which usually moves inversely to gold is currently down 0.11%, currently trading at 92.203 basis points .during the first day of the two-day testimony before the house of representatives financial services committee, the chairman of the federal reserve of the united states, jerome powell stated that monetary policy would remain accommodative. while insisting inflationary pressures were temporary, he added that the federal reserve expects to continue its bond-buying until there is “substantial further progress” in the job market, predicting that interest rates will likely remain near zero until at least 2023. jerome powell’s second day of testimony will take place later in the day.in other news shaping the market, the bank of korea kept its interest rate unchanged at 0.5% as it handed down its policy decision during the asian trading session. the bank of japan will wrap the week up by handing down its decision on friday.

 

NIGERIAN SENATE APPROVES $8.325 BLN FOREIGN BORROWING PLAN

Nigeria’s Senate on Thursday approved an external borrowing plan of $8.325 billion and 490 million euros from international lenders including the World Bank for infrastructure projects.More than half of the funds will be provided by the Industrial Commercial Bank of China and the Chinese Exim bank, according to a Senate committee report titled 2018-2020 External Borrowing Rolling Plan.

GTBANK NAMED OLUSANYA AS MD, AGBAJE REMAINS GCEO OF PARENT COMPANY

The Guaranty Trust Bank (GTBank) has appointed Mrs. Miriam Olusanya, as its new managing director (MD).In a notification to the Nigerian Exchange (NGX) Limited yesterday, the tier one lender, which also announced the successful completion of its restructuring into a holding company structure, said Mr. Segun Agbaje would remain as the group chief executive officer(GCEO) of the Guaranty Trust Holding Company Plc (GTCo) while Mr. Sola Oyinlola would be the chairman.Other members of GTCO board are: Mrs. Cathy Echeozo (Non-Executive Director), Mrs. Helen Bouygues (Independent Non-Executive Director), and Mr. Adebanji Adeniyi (Executive Director).

The banking subsidiary, GTBank’s Board has Mr. Ibrahim Hassan as chairman while Olusanya is the MD and Mr. Jide Okuntola (Deputy Managing Director). Other directors are: Mr. Olabode Agusto (Non-Executive Director), Ms. Imponi Akpofure (Independent Non-Executive Director), Mrs. Victoria Adefala (Independent Non-Executive Director), Mr. Jide Okuntola (Deputy Managing Director) and Mr. Haruna Musa (Executive Director).According to the company, the board was reconstituted following the retirement of about four Directors. Agbaje had on Monday said the group was excited about the opportunities the new structure had opened up which would be turned into better value for all stakeholders.

HEADLINE INFLATION LIKELY TO CREEP BACK UP IN JUNE 2021

Based on our market survey and time series analysis, we are projecting that headline inflation for June will likely creep back up to 18.1%, a level last seen in March 2021. This could represent a point of inflection on the trend line of declining inflation which started in April 2021. Some skeptical analysts had questioned the basis for a decline in the rate of inflation at a time when global food prices and other causative factors of inflation were moving in the opposite direction. One of the key catalysts of price inflation in Nigeria has been the pass-through effect of exchange rate adjustments on domestic prices. One reason why there has been a delayed impact of the recent depreciation of the naira on the domestic price level is the outside lag effect. It was only on May 24, 2021, that the CBN moved the exchange rate. Therefore, the impact will only be felt in June and July. Other causative factors include higher logistics costs, insecurity, and planting season effect.

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: 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: Thursday, 15th July, 2021

ZOCK CAPITAL AND INVESTMENT  MARKET UPDATE AS AT 15TH JULY 2021 

Foreign exchange Market

The naira maintained stability against the U.S. dollar at both the official and parallel market segments on Thursday. For the I&E FX market, Naira remained unchanged at 411.20. Most participants maintained bids between 387.67 and 412.30 per dollar. Data posted on the FMDQ Security Exchange where forex is officially traded showed that the local unit closed at N411.20 per $1 at the NAFEX window, the same rate it traded in the previous session on Wednesday.

This occurred as the domestic currency staged an intraday low of N412.50 and a high of N400.00 before closing at N411.20 as of the close of business on Thursday. Forex supply slumped by 42.2 per cent, with $123.69 million recorded at the end of the market session as against the $213.99million recorded in the previous session on Wednesday.

DAILY FOREIGN EXCHANGE RATES (DOLLAR / POUNDS / EURO )

CBN INTERBANK RATES

FIXED INCOME SECURITIES  AND MONEY MARKET  UPDATE

SECONDARY MARKET

The secondary market treasury Bills experienced a bearish sentiment with average yield closing at 7.10 % across the tradable benchmark curve. The 30-Sep-21 maturity bill recorded the highest yield increase of 32bps.
Average yield across the short-term maturities inched by 31 bps, while the average yield across the long term maturities dipped by 1 basis point. However, the average yield across the mid maturities closed flat at 5.93 %.

OMO BILLS

On the flip side, the OMO bills market yield curve remained flat across all maturities. Average yields across short term, mid and long term maturities closed at 8.77 %, 9.48 % and 10.17 percent, respectively.

TREASURY BILLS PRIMARY MARKET AUCTION (PMA).

BENCHMARK SECONDARY MARKET TREASURY BILLS

MONEY MARKET


The Overnight  rate  closed at 7.25 %  as against the last close of 14.50 % and the Open Buy Back  rate decreased by 7.00 % to close at 7.00 % compared to 14.00% on the previous day owing to improved  system liquidity. The major inflows from treasury bills and FGN bonds maturities was  N711.18 billion.

INVEST IN FGN MONTHLY BOND AUCTION FOR JULY 2021
The Central Bank of Nigeria on the authority of The Debt Management Office on behalf of the Federal Government Of Nigeria Offers for Subscription by Auction and is authorized to receive applications for the following;

  • N50,000,000,000 – 13.98% FGN FEB 2028 (10-Yr Re-opening)
  • N50,000,000,000 – 12.40% FGN MAR 2036 (20-Yr Re-opening)
  • N50,000,000,000 – 12.98% FGN MAR 2050 (30-Yr Re-opening)

Auction Date: July 19, 2021
Settlement Date: July 23, 2021
Issuer: Federal Government of Nigeria
Units Of Sale: N1,000 per unit subject to a minimum subscription of N50,001,000 and in multiples of N1,000 .
Interest rate: For Re-openings of previously issued bonds, (where the coupon is already set), successful bidders will pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned, plus accrued interest from the original issue date.
Interest payment: Payable semi-annually
Redemption: Bullet repayment on the maturity date.

PREVIOUS FGN BOND PMA AUCTION RESULT

FGN bonds secondary market was relatively quiet as the average bond yield closed at 9.92 %. Average yield across the short tenor of the curve expanded by 2 bps, while the average yield across medium tenor and long tenor of the curve declined by 2 bps and 7 bps, respectively.

FGN BOND MARKET YIELD CURVE

MARKET NEWS HEADLINES

Naira Gains At Official Window

Bank of canada holds interest rate, says it will curb bond purchases the bank of canada held its key overnight interest rate at a record low 0.25% as expected on wednesday and said it would cut its weekly net purchases of government of canada bonds to a target of c$2 billion ($1.6 billion) from c$3 billion.in a statement, the central bank said it remained committed to keeping the interest rate unchanged until economic slack was absorbed. this is expected to happen some time in the second half of 2022.

Gold bullish over U.S Federal Reserve Chairman’s stance

Gold started the london session today bullish, as U.S. Federal reserve chair, Jerome powell signalled the central bank’s “powerful support” for economic recovery.gold futures is up 0.46%, trading at $1,833.45 an ounce, remaining above the $1,800 mark. the dollar index, which usually moves inversely to gold is currently down 0.11%, currently trading at 92.203 basis points .during the first day of the two-day testimony before the house of representatives financial services committee, the chairman of the federal reserve of the united states, jerome powell stated that monetary policy would remain accommodative. while insisting inflationary pressures were temporary, he added that the federal reserve expects to continue its bond-buying until there is “substantial further progress” in the job market, predicting that interest rates will likely remain near zero until at least 2023. jerome powell’s second day of testimony will take place later in the day.in other news shaping the market, the bank of korea kept its interest rate unchanged at 0.5% as it handed down its policy decision during the asian trading session. the bank of japan will wrap the week up by handing down its decision on friday.

 

NIGERIAN SENATE APPROVES $8.325 BLN FOREIGN BORROWING PLAN

Nigeria’s Senate on Thursday approved an external borrowing plan of $8.325 billion and 490 million euros from international lenders including the World Bank for infrastructure projects.More than half of the funds will be provided by the Industrial Commercial Bank of China and the Chinese Exim bank, according to a Senate committee report titled 2018-2020 External Borrowing Rolling Plan.

GTBANK NAMED OLUSANYA AS MD, AGBAJE REMAINS GCEO OF PARENT COMPANY

The Guaranty Trust Bank (GTBank) has appointed Mrs. Miriam Olusanya, as its new managing director (MD).In a notification to the Nigerian Exchange (NGX) Limited yesterday, the tier one lender, which also announced the successful completion of its restructuring into a holding company structure, said Mr. Segun Agbaje would remain as the group chief executive officer(GCEO) of the Guaranty Trust Holding Company Plc (GTCo) while Mr. Sola Oyinlola would be the chairman.Other members of GTCO board are: Mrs. Cathy Echeozo (Non-Executive Director), Mrs. Helen Bouygues (Independent Non-Executive Director), and Mr. Adebanji Adeniyi (Executive Director).

The banking subsidiary, GTBank’s Board has Mr. Ibrahim Hassan as chairman while Olusanya is the MD and Mr. Jide Okuntola (Deputy Managing Director). Other directors are: Mr. Olabode Agusto (Non-Executive Director), Ms. Imponi Akpofure (Independent Non-Executive Director), Mrs. Victoria Adefala (Independent Non-Executive Director), Mr. Jide Okuntola (Deputy Managing Director) and Mr. Haruna Musa (Executive Director).According to the company, the board was reconstituted following the retirement of about four Directors. Agbaje had on Monday said the group was excited about the opportunities the new structure had opened up which would be turned into better value for all stakeholders.

HEADLINE INFLATION LIKELY TO CREEP BACK UP IN JUNE 2021

Based on our market survey and time series analysis, we are projecting that headline inflation for June will likely creep back up to 18.1%, a level last seen in March 2021. This could represent a point of inflection on the trend line of declining inflation which started in April 2021. Some skeptical analysts had questioned the basis for a decline in the rate of inflation at a time when global food prices and other causative factors of inflation were moving in the opposite direction. One of the key catalysts of price inflation in Nigeria has been the pass-through effect of exchange rate adjustments on domestic prices. One reason why there has been a delayed impact of the recent depreciation of the naira on the domestic price level is the outside lag effect. It was only on May 24, 2021, that the CBN moved the exchange rate. Therefore, the impact will only be felt in June and July. Other causative factors include higher logistics costs, insecurity, and planting season effect.

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: 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.