Average Money Market Rate Rose By 6.65% To Settle At 16.86%

Monday, April 29, 2019 07:00 PM / Anchoria AM Research

Money Market

The money market rate increased last week as the Overnight rate (OVN) and Open Buy Back (OBB) rose to 17.29% and 16.43% from 10.57% and 9.86% respectively. Consequently, the average money market rate rose by 6.65% to settle at 16.86%. Major outflow for the week included: OMO Sales of cN161.69 bn, Weekly Wholesale, Invisible and SME FX auction of $210mn, Bond auction of cN97.40bn and Biweekly Retail FX auction while Major inflow for the week included: OMO maturity of cN30bn and CBN retail FX auction refund of cN175bn.

Barring any significant liquidity mopping action of the CBN, the money market rates are expected to trend lower due to expectation of inflow from FAAC payment and OMO maturity of N62 billion.

Source: Anchoria AM Research, FMDQ OTC

Forex: USD/NGN

The CBN Official rate fell marginally by 0.02% last week to close at N306.90/$ while the rate in the Investors and Exporters’ FX Window rose by 0.10% to close at N360.64/$ due to decrease in market turnover rate by 16.33% week-on-week to $1.20bn from $1.43bn in previous week However, Naira at the parallel market remained unchanged to close at N360.00/$ (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.

Source: Anchoria AM Research, FMDQ OTC

Commodities

Brent Crude Oil rose by 0.25% to close at $72.15 per barrel while WTI Crude Oil fell by 1.09% to close at $63.30 per barrel. The decline in WTI crude oil price was due to President Donald Trump personal push to OPEC to keep prices down and as Russia’s assured it will resume normal oil flows to Eastern Europe after chemical contamination.

On the bullish side, the White House announced it will tighten sanctions on Iranian crude flows, discontinuing exemptions that allow China and some other buyers to keep importing.

Fixed Income

Bond: FGN

The Bond Market closed on a bearish note last week as the DMO held its monthly Bond Auction in which the debut 30 years Bond was issued. Average yields rose by 14bps to close the week at 14.29%.

The Bond Auction last week witnessed 149% subscription rate with the Debt Management Office (DMO) allotting a total of N97.4 billion. The 30-year Bond was priced at 14.80%.

Secondary Market

Source: Anchoria AM Research, FMDQ OTC

Treasury Bills

The secondary treasury bills market closed on a bullish note last week due to relatively buoyant liquidity and expectation of reduced spot rate in the Primary Market auction which is scheduled to hold this week. Average yield rose by 14bps to close at 13.12%.

Secondary Market

Source: Anchoria AM Research, FMDQ OTC

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

Related News

1.       Average Yield Contracts to 13.1% Amidst Buying Interests; PMA Holds on Thursday

2.      Summary of April 2019 FGN Bond Auction Results

3.      Average Yield Moderates to 13.3% on Absence of OMO Auctions

4.      Average Money Market Rate Fell By 10.72% To Settle At 10.22%

5.      Invest in FGN Monthly Bond Auction – April 2019

6.      Ecobank Launches New 5-Year Eurobond at 9.75% Re-Offer

7.      Outlook For Yields On FGN Bonds Remain Relatively Stable With Renewed Buying Interests On Maturities

8.     Bond Yields Maintain Slight Uptrend Following Selloff on the 20-year

9.      Bond Yields Trend Higher Following Selloff on Mid and Long Tenors

10.  Funding For CBN Wholesale FX Auction Pressures Short Term Rates Higher

11.   Average T-Bills Yield Contracts Marginally to 13.4% as CBN Resumes OMO Auctions

12.  Average Money Market Rate Rose By 5.45% To Settle At 15.72%

13.  Bond Yields Compress Marginally Following Bargain Hunt on Short Tenors