Average Money Market Rate Rose Significantly By 20.04% To Settle At 23.57% From 3.54%

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Monday, September 16, 2019   /01:27PM  / Anchoria AM Research / Header Image Credit: Anchoriaonline.com

 

Money Market

The average money market rate rose significantly by 20.04% to settle at 23.57% from 3.54% in the previous week due to constraints in system liquidity during the week. The system liquidity is estimated to have closed the week at N34 billion from N692 billion at the opening of market on Monday.

Major inflow for the week included: OMO Maturity of cN334bn and CBN Retail refund of cN180bn while major outflow included Weekly Wholesale, Invisible and SME FX auction of $210mn, and OMO sale of cN527bn

The Open Buy Back (OBB) and Overnight rate (O/N) rose to 22.43% and 24.71% from 3.21% and 3.86% respectively in the previous week.

We expect money market rate to remain high this week with the anticipation for OMO auction during the week.

 

Instrument

06/09/2019

13/09/2019

Change

OBB

3.21%

22.43%

+19.22%

OVN

3.86%

24.71%

+20.85%

 

Forex: USD/NGN

The foreign exchange market remained relatively stable last week as the CBN Official Rate remained unchanged to close at N306.90/$ while the rate at I&E FX window fell by 0.01% to close at N362.04/$. The rate in the parallel market remained unchanged at N360.00/$.

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.

 

06/09/2019

13/09/2019

Change

CBN Official Rate

306.90

306.90

+0.00%

I&E FX Window

362.08

362.04

-0.01%

Everdon BDC Rate

360.00

360.00

+0.00%

 

Commodities

The crude oil price closed on a negative note for the week ended 13th September 2019. However, there was a significant jump in the crude oil price upon the attack of Saudi Arabia Crude Production attack on Saturday, 14th September 2019.

According to Bloomberg, Oil posted its biggest ever intraday jump to more than $71 a barrel after the said strike on a Saudi Arabian oil facility removed about 5% of global supplies, an attack the U.S. has blamed on Iran.

 

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Fixed Income


Bond: FGN

The secondary sovereign Bond Market closed on a slightly bearish note last week with the average yield up by 5bps to closed at 14.20% from 14.15% in the previous week. The narrative was the same for the Sovereign Eurobond market as the Average Sovereign Eurobond yield rose by 9bps to close at 6.34% from 6.25% in the previous week, while the average yield on Corporate Eurobond fell by 3bps to 5.45% from 5.48%.

This week, we expect the Bond traders to remain cautious as the sentiment remains weak


Secondary Market

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Source: Anchoria AM Research, FMDQ OTC

 

Treasury Bills

Due to constrained system liquidity, the treasury bill (secondary market) closed on a bearish note. The average T-bills yield rose by 6bps from 13.33% to 13.39% in the previous week. See next page for T-bills PMA and OMO Auction results.

 

Secondary Market

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Source: Anchoria AM Research, FMDQ OTC


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


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