Theanalyst Logo
Market Date: 25-03-2014   |    Index: 37728.50 0.34%   |    Home | Sign in | Register Now  
Agriculture All One Min News Archives Bonds Cap Mkt Sentiments Capital Market CASHLESS NIGERIA Commodities Corporate Earnings Daily & Weekly Market Updates Enterpreneurship ETFs Forex Frauds & Scandals General Global Market Insurance Investors NewsBeat Islamic Finance Mergers & Aquisitions Money Market Mortgage Mutual Funds Nigeria Economy Oil Sector Opinions and Analysis Pensions People Politics Power Products & Services Professionals Property Public Offers Private Placements Regulators REITs STOCKPICKS Taxation Telcos Travel & Tours Unlisted Stocks World of Business

The Nigeria Bond Watch - Review and Outlook @270114


Category: Bonds


  Read (924)  
The Nigeria Bond Watch - Review and Outlook @270114

Monday, January 27, 2014 9:55 AM/ DLM Research

Download Full Report Here 

Analysis
During the review week, the dominant theme in the financial markets was the expected increase in cash reserve requirement (CRR) on public sector deposits to 75% from 50% by the monetary authorities. The other major activity during the week was the sale of treasury and OMO bills.

In line with our expectations, the monetary policy committee retained MPR at 12% for the fourteenth time whilst CRR – on private sector deposits, liquidity ratio and net forex open position were retained at 12%, 30% and 1% respectively. However, CRR on public sector deposits (a major source of liquidity in the financial markets) was increased from 50% to 75%. We however observed that there was no significant impact on the bond market as a result of this change as it was in line with market expectation. In addition, the CBN has indicated plans to take immediate steps to redress the supply demand imbalance in the foreign exchange market while maintaining its focus on anti-money laundering activities.

Whilst we acknowledge the considerations which informed the committee’s policy stance i.e. macroeconomic stability, rising cost of liquidity management on the back of excess liquidity in the banking system, threats facing the oil sector and the loose fiscal stance; we remain strong advocates of sustainable economic growth driven by long-term low interest rates amongst other factors.

The OTC market was characterised by increased activities as a result of demand from domestic investors particularly the PFAs. This development resulted in a slight increase in price of some traded bonds though there was a reversal of this trend at the end of the week.  We expect the current level of activities in the market to continue in the week ahead in the absence of any major economic event.

At the treasury bills auction, N32.89billion worth of 91day treasury bills was offered and while N34.89billion was sold at the rate of 10.75%, while N50.0billion and N120.0billion worth of 182day and 364day were offered as N48.0billion and N120.0billion were sold at the rates of 11.85% and 12.0% respectively. Total subscription during the auction stood at N350.19billion. However, we note the high subscription level witnessed during the auction by the allotment recorded compared to the amount on offer.

Liquidity tightening was sustained during the week via open market operations. A total of N280.0billion worth of OMO bills with tenors ranging between 28days and 48days were offered, while c.N105.31billion was sold at marginal ranging between rates 11.20% and 11.40%. We however observed the low sales recorded during the auction as there were no allotments during most of the auctions. The level of bids submitted by investors during the OMO bills auctions could not be left out as a contributory factor to the non-allotment.

In the week ahead, we expect the redemption of OMO bills worth c.N144billion. In view of this, the current elevated system liquidity will be sustained.

Related News:
1.
The Nigeria Bond Watch - Review and Outlook @021213 
2.
The Nigeria Bond Watch - Review and Outlook @091213


Disclaimer/Advice to Readers: 
While the website is checked for accuracy, we are not liable for any incorrect information included. The details of this publication should not be construed as an investment advice by the author/analyst or the publishers/Proshare. Proshare Limited, its employees and analysts accept no liability for any loss arising from the use of this information. All opinions on this page/site constitute the authors best estimate judgement as of this date and are subject to change without notice. Investors should see the content of this page as one of the factors to consider in making their investment decision. We recommend that you make enquiries based on your own circumstances and, if necessary, take professional advice before entering into transactions. This article is published with the consent of Dunn Loren Merrifield, the author(s) for circulation to the online investment community in accordance with the terms of usage. Further enquiries should be directed to the author whose e-mail is Dunn Loren Merrifield Limited [Email:todukoya@dunnlorenmerrifield.com






Comment With Your Facebook or Yahoo! ID



Join The Investors' Forum



Take A Poll

What source do you usually use in your shares/stocks selection?

Tips from People I Trust
Top Movers/New Highs from Proshare
Data from the NSE
Advice from a Broker

Current Results



Home

About us
T & C of Use
Our Policies
Advertise with Us
Subscribe / Unsubscribe
Site Map
News Feed - RSS
Newsletter
Contact Us
Discussion Forum
Market News & Reports

Daily Market Reports
Stock Picks
Sentiments Analysis
Investors Newsbeat
Corporate Actions
Capital Market Updates
Offers & Rights
Analysis & Opinion
Bonds Update & Outlook
The Economy
The Regulator
People
CBN Governor 2014
Market Data

NSE Live
Global Markets
Afrcan Markets
Equities
Bonds
Currency
Commodity
ETF's
Funds
REIT's
Investor Relations

Investor Relations Central
Share Support Services
Online Reputation Audit
Management Information
Financials & Analysis
Fundamental Analysis / Equity Reports
Research & Reports
Technical Analysis/ Charts
Corporate Earnings
Presentations
Documents
Our Services

Research & Market Intelligence
Analyst Services
Offers & Rights Support Services
IR Service Support
Alert & Subscription Service
Market Recommendations
Capital Market Training
Surveys
Events Coverage
File a Complaint

Investor Tools

Todays Market Action
Online Trading & Execution
Explore Technicals
Valuation Statistics
Peer Comparison
Performance Comparison
Stock Recommendation Tracker
Results Screener
Market Directory
Discussion Forum

The Analyst is a market service provided by Proshare Nigeria Limited.
Registered Office: The Upper Room, Plot 1, Lekan Asuni Close, Off Toyin Omotosho Street, Omole Phase II, Isheri LGA, P.O. Box 18782, Ikeja, Lagos, Nigeria. Telephone +234 1 762 4131 Registered in Nigeria.