Average Money Market Rate Rose By 3.12% To Settle At 14.54%

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Monday, March 25, 2019 12:58 PM / Anchoria AM Research

 

Money Market

The money market rate increased marginally last week as the Overnight rate (OVN) and Open Buy Back (OBB) rose to 14.83% and 14.25% respectively. Consequently, the average money market rate rose by 3.12% to settle at 14.54% due to the decrease in the System liquidity to cN18.0bn from cN413.9bn in the previous week. Major outflow for the week included: OMO Sales of cN409.69bn (N116.31bn on Tuesday and N283.38bn on Thursday), and Weekly Wholesale, Invisible and SME FX auction of $210mn while Major Inflow included OMO Maturity of cN156bn and Coupon Payment of cN90bn.

 

We expect the rates to inch higher on Monday as Banks prepare for another round of CBN weekly FX auctions on Monday.

Instrument

15/03/2019

22/03/2019

Change

OBB

11.17%

14.25%

+3.08%

OVN

11.67%

14.83%

+3.16%

Source: Anchoria AM Research, FMDQ OTC

 

Forex: USD/NGN

The CBN Official rate reversed its upward trend last week to close at N306.90/$, a 0.02% decrease while the rate in the Investors and Exporters’ FX Window rose by 0.07% to close at N360.43/$ as we continue to witness a buoyant market turnover with inflows from Foreign Portfolio Investors. 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.


15/03/2019

22/03/2019

Change

CBN Official Rate

306.95

306.90

-0.02%

I&E FX Window

360.18

360.43

+0.07%

Everdon BDC Rate

360.00

360.00

+0.00%

Source: Anchoria AM Research, FMDQ OTC

 

Commodities

After four days of consecutive increase in the Crude oil prices to hit their highest level since November 12, Crude Oil prices fell dramatically on Friday due to looming over the state of the global economy provoked sell offs of some commodities. To close the week, Brent Crude Oil fell by 0.19% to close at $67.03 per barrel while WTI Crude Oil rose by 0.89% to close at $59.04 per barrel

 

Fixed Income

Bond: FGN

The Bond Market was relatively quiet last week as apathy of Foreign Portfolio Investors continues ahead of the MPC meeting and Bond Auction this week, the bond market ended the week on a bearish note with sell offs seen on most maturities especially 2028 (+15bps) and 2020 (+22bps) bonds. Average yields rose marginally by 4bps to close the week at 14.23%.

Week Ahead: We expect the market to trade quiet ahead of Bond Auction scheduled which is set to hold on 27th March 2019 and MPC meeting between 25th and 26th March 2019.

 

Secondary Market

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Source: Anchoria AM Research, FMDQ OTC

 

Treasury Bills

Due to the decrease in system liquidity during the week, the treasury bills market traded on a bearish note. Consequently, the average yield rose by 36bps to close the week at 13.66%. The T-bills and OMO auctions conducted during the week witnessed a reduction in rate.

 

We expect market to be quiet ahead of the MPC meeting on Monday and Tuesday.

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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