Average Money Market Rate Rose By 3.46% To Settle At 8.96% Up From 5.50%

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Monday, June 24, 2019  / 01:38PM / By Anchoria AM Research

 

Money Market 

The average money market rate rose by 3.46% to settle at 8.96% up from 5.50% in the previous week despite a buoyant system liquidity seen during the week as CBN held off on the issuance of OMO which contributed to the system liquidity. The increase in the average money market rate was due to the funding pressure since on Monday as a result of the Wholesale, Invisible and SME FX auction. 

The Overnight rate (OVN) and Open Buy Back (OBB) rose to 9.21% and 8.71% from 5.71% and 5.29% respectively in the previous week. Major inflow for the week included: OMO Maturity of cN75bn while major outflow included Weekly Wholesale, Invisible and SME FX auction of $210 mn. 

With the expectation of renewed OMO auction, bond auction and bi-weekly FX retail auction, the money market rate is anticipated to close high this week.

 

Instrument

07/06/2019

14/06/2019

Change

OBB

10.86%

5.29%

-5.57%

OVN

11.43%

5.71%

-5.72%

 

Forex: USD/NGN 

The foreign market remained relatively stable last week as the CBN Official Rate and the rate at I&E FX window fell marginally by 0.02% and 0.01% to close at N306.95/$ and N360.49/$ respectively while the rate in the parallel market remained unchanged at N361.00/$. 

On the average, market turnover closed at $190 million during the week from $187 billion in previous week. This represents c2% increase in average market turnover. 

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.


14/06/2019

21/06/2019

Change

CBN Official Rate

307.00

306.95

-0.02%

I&E FX Window

360.51

360.49

-0.01%

Everdon BDC Rate

361.00

361.00

+0.00%

Source: Anchoria AM Research, FMDQ OTC

 

Commodities

 

Instrument

14/06/2019

21/06/2019

Change

Instrument

BRENT OIL

62.01

65.20

+5.14%

BRENT OIL

WTI OIL

52.51

57.82

+10.11%

WTI OIL

 

Fixed Income

 

Bond: FGN

The Bond Market closed on a bullish note last week with yields compressing across most maturities. Average yields fell by 6bps to close the week at 14.20%. During the week, we observed investors activities on the short to mid tenored bond.

 

The following factors shaped the secondary Bond market last week:

a)     Expected rate cut on US Fed rate by the committee

b)     Renewed supply as investors prepare for the June Bond auction

c)      Significant decline in the Treasury bills stop rate.

 

We expect investors to be cautious ahead of the Bond auction, which is scheduled to hold on Wednesday, 26 June 2019.


Secondary Market

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Source: Anchoria AM Research, FMDQ OTC

 

Treasury Bills

The Primary Market Auction for T-bills witnessed an oversubscription of 755% with appetite more for the longest tenored bill (364 days) as investors sought for high return. The stop rate fell across all tenors for 91 days fell by 40bps (9.60%), 182 days fell by 6bps (11.95%) while 364 days fell by 32bps (12.02%) 

Despite a relatively buoyant system liquidity due to the absence of OMO activities, the secondary treasury bills market closed on a bearish note. The average yield rose by 3bps to close at 12.45% from 12.42% in the previous week.


Secondary Market

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Source: Anchoria AM Research, FMDQ OTC

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T-Bills Primary Market Auction Result - 19 June 2019

 

91 day

182 day

364 day

Offer Amount (N'bn)

3.00

4.00

10.61

Total Subscription (N'bn)

3.27

12.53

117.20

Allotment (N'bn)

3.00

4.00

10.61

Subscription Rate

109%

313%

1105%

Current Stop Rates (%):

9.60%

11.89%

12.02%

Previous Spot Rates (%)

10.00%

11.95%

12.34%

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



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