Bonds & Fixed Income | |
Bonds & Fixed Income | |
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Monday, May 13, 2019 02:04PM / By
Anchoria AM Research
Money Market
Barring any significant inflow this week, we expected the money market
rates to inch upward as the CBN issue OMO.
Instrument |
03/05/2019 |
10/05/2019 |
Change |
OBB |
5.29% |
9.14% |
+3.85% |
OVN |
5.93% |
10.00% |
+4.07% |
Source:
Anchoria AM Research, FMDQ OTC
Forex: USD/NGN
The
CBN Official rate rose marginally by 0.02% last week to close at N307.00/$
while the rate in the Investors and Exporters’ FX Window inched slightly up by
0.06% to close at N360.88/$ despite an increase of 12% in average market
turnover during the week. However, Naira at the parallel market remained
unchanged to close at N361.00/$ (using the Everdon BDC Rate).
We expect rates in the parallel market to remain constant as the apex
bank continues to supply FX into the market, coupled with its frequent Wholesale
and Retail SMIS programme.
03/05/2019 |
10/05/2019 |
Change |
|
CBN Official Rate |
306.95 |
307.00 |
+0.02% |
I&E FX Window |
360.65 |
360.88 |
+0.06% |
Everdon BDC Rate |
361.00 |
361.00 |
+0.00% |
Source:
Anchoria AM Research, FMDQ OTC
Commodities
Brent Crude Oil and WTI Crude Oil fell by 0.32% and 0.45% to close at
$70.62 and $61.66 per barrel respectively despite geopolitical tensions between
the United States and Iran. The fall in the crude oil price was due to
uncertainty surrounding global trade as tension between US and China continues.
Fixed Income
Bond:
FGN
The
Bond Market closed on a bullish note last week as average yields fell by 12bps
to close the week at 14.06% following the news of re-appointment of the CBN
governor for another five-year term. Yield across all maturities fell with the
exception of the longest tenor bond (2049) which rose by 3bps. Notable last
week were activities on 2023, 2034 and 2027 bonds with yield declining by
62bps, 41bps and 32bps respectively.
We
expect the bullish to continue in the bond space as market participants
anticipate decline in rate of short-term instruments at the auction.
Secondary
Market
Source:
Anchoria AM Research, FMDQ OTC
Treasury
Bills
The
secondary treasury bills market closed on a bullish note last week due a
relatively buoyant liquidity. Average yield fell by 21bps to close at 12.91%
from 13.13% in previous week.
During
the week, the CBN renewed its liquidity mopping activities with spot rate on
OMO issued falling across tenors.
Secondary
Market
Source: Anchoria AM Research, FMDQ OTC
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Rate Fell Significantly As The OVN and OBB Fell To 5.93% and 5.29%
7. Demand For Long
Term Bonds Pressure Yields Marginally Lower
8. Debut 30-Year
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