Average Money Market Rate Decreased By 7.04% To Settle At 4.54% Due To Buoyant System Liquidity

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Monday, June 03, 2019  / 02:15PM / By Anchoria AM Research

 

Money Market

The average money market rate decreased by 7.04% to settle at 4.54% due to buoyant system liquidity, which is estimated to have closed the week at cN410bn from cN220bn in the previous week. The Overnight rate (OVN) and Open Buy Back (OBB) fell to 4.93% and 4.14% from 12.00% and 11.14% respectively in the previous week. 

Major Inflow for the week included: OMO Maturity of cN154bn, while major outflow for the week included: Weekly Wholesale, Invisible and SME FX auction of $210mn. 

We expect the rate to remain stable this week barring any significant outflow via OMO during the week.


Instrument

24/05/2019

31/05/2019

Change

OBB

11.14%

4.14%

-7.00%

OVN

12.00%

4.93%

-7.07%

Source: Anchoria AM Research, FMDQ OTC

 

Forex: USD/NGN

The CBN Official rate rose marginally by 0.02% last week to close at N306.95/$ while the rate in the Investors and Exporters’ FX Window rose by 0.10% to close at N360.74/$ due to reduction of 28% in average market turnover to close at $123 million during the week from $171 billion in previous week. However, Naira at the parallel market remained unchanged at N361.00/$ (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.


24/05/2019

31/05/2019

Change

CBN Official Rate

306.90

306.95

+0.02%

I&E FX Window

360.39

360.74

+0.10%

Everdon BDC Rate

361.00

361.00

+0.00%

Source: Anchoria AM Research, FMDQ OTC

 

Commodities

Due to continued increase in the US crude oil inventories and as trade tension heightened, the crude oil market was largely bearish with Brent Crude Oil and WTI Crude Oil down by 6.11% and 8.75% to close at $64.49 and $53.50 per barrel from $68.69 and $58.63 per barrel respectively.

 

Fixed Income

Bond: FGN

The Bond Market closed on a bullish note last week as average yields fell by 3bps to close the week at 13.85%. This is due to some demand witnessed in the shorter tenor bonds as CBN suspended OMO activities during the week. Notable include 2021 Bond (-53bps). 

During the week, the Debt Management Office (DMO) announced its intention to raise N15 billion in its series II Green Bond. 

We expect the bond secondary market to trade on a quiet note in the holiday shortened week as market participants remain fixated on the direction of US-China trade war and CBN stances regarding short term securities.


Secondary Market

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Source: Anchoria AM Research, FMDQ OTC

 

Treasury Bills

Despite a buoyant system liquidity and absence of OMO activities during the week, the activities in the secondary treasury bills market remained quiet as market participants remained cautious ahead of Primary Market Auction on Thursday, 30th May 2019. Average yield rose marginally by 3bps to 12.17% from 12.15% in the previous week.

 

The Nigerian Primary Market Auction witnessed an oversubscription rate of 290% with the average spot rate trending downward by 21bps.

 

Secondary Market

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Source: Anchoria AM Research, FMDQ OTC


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Nigerian Treasury Bill Auction Result – 30 May 2019

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


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