Average Money Market Rate Dropped Marginally By 0.53% To Settle At 18.25% From 18.79%

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Monday, August 26, 2019    / 01:47PM / By Anchoria AM Research  / Header Image Credit: Sec.gov

 

Money Market

The average money market rate dropped marginally by 0.53% to settle at 18.25% from 18.79% in the previous week despite significant constraints in system liquidity to a negative territory as FX intervention by the Central Bank of Nigeria (CBN) continued during the week. The system liquidity is estimated to have closed the week at a negative of N360 billion from c$295 billion in the previous week.

 

The Open Buy Back (OBB) and Overnight rate (O/N) fell to 17.71% and 18.79% from 18.00% and 19.57% respectively in the previous week. Major inflow for the week included: OMO Maturity of cN92bn, and Coupon Payment of cN49bn while major outflow included Weekly Wholesale, Invisible and SME FX auction of $210mn, Bond auction of cN15bn

 

With the anticipated inflow from FAAC payment this week, we expect the money market rate to moderate.

 

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Source: Anchoria AM Research, FMDQ OTC



Forex: USD/NGN

The foreign exchange market remained relatively stable last week as the CBN Official Rate rose marginally by 2bps to close at N306.95/$ while the rate at I&E FX window fell marginally by 0.08% to close at N363.14/$. The rate in the parallel market remained unchanged at N360.00/$.

 

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.


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Source: Anchoria AM Research, FMDQ OTC



Commodities

Oil price fell significantly on Friday following the news of $75 billion tariff on US goods. This is expected to affect the oil price this week as investors are expected to remain more conscious.

 

See below the week on week performance.

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Fixed Income


Bond: FGN

Following the Bond auction during week which witnessed significant undersubscription with a total subscription of N95 billion out of the N145bn issued, representing a subscription rate of c66%. This is the lowest subscription rate this year. Consequently, the stop rate fell by an average of 63bps with the Apr 2023, Apr 2029 and Apr 2019 closing at 14.20%, 14.19% and 14.59% respectively.

 

The secondary Bond Market closed on a bearish note with the average yield up by 15bps to closed at 14.39% from 14.24% in the previous week.

 

We expect the bearish trend to continue in the week as global economic outlook remain negative due the trade war between the two countries (US & China).

 

Secondary Market

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Source: Anchoria AM Research, FMDQ OTC

 

Treasury Bills

The treasury bills market remained largely bearish last week as sell off remained prevalent in the T-bills market due to constrained system liquidity and Offshore investors sell off. The Average T-bills yield rose to 15.15% from 13.85% in the previous session. The Central Bank of Nigeria declared "No Sale" for the OMO auction conducted during the week.



Secondary Market

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August Bond Auction Result


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Anchoria Research: +234 908 720 6076;  research@anchoriaam.com



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