Money Market Rate Decreased As OVN and OBB Fell To 5.29% and 4.57%

Proshare

Monday, May 20, 2019  / 01:42PM / By Anchoria AM Research

 

Money Market

The money market rate decreased last week as the Overnight rate (OVN) and Open Buy Back (OBB) fell to 5.29% and 4.57% from 10.00% and 9.14% respectively. Consequently, the average money market rate decreased by 4.64% to settle at 4.93% due to the absence of CBN liquidity mopping activity (OMO) last week. The System Liquidity is estimated to have increased to close at cN290bn. Major Inflow for the week included: OMO Maturity of cN117bn, DANGCEM and FSDH Commercial Paper Maturity of cN45bn while major outflow for the week included: Weekly Wholesale, Invisible and SME FX auction of $210mn.

 

We expect the rate to trend upward this week as CBN is expected to renew its mopping activity and as Bond auction is expected to hold during the week.

Instrument

10/05/2019

17/05/2019

Change

OBB

9.14%

4.57%

-4.57%

OVN

10.00%

5.29%

-4.71%

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 fell slightly down by 0.11% to close at N360.50/$ despite an increase of 48% in average market turnover to close at $1.44 billion during the week. However, Naira at the parallel market remained unchanged to close at N361.00/$ (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.

10/05/2019

17/05/2019

Change

CBN Official Rate

307.00

306.95

-0.02%

I&E FX Window

360.88

360.50

-0.11%

Everdon BDC Rate

361.00

361.00

+0.00%

Source: Anchoria AM Research, FMDQ OTC

 

Proshare Nigeria Pvt. Ltd.


Commodities

Brent Crude Oil and WTI Crude Oil rose by 2.25% and 1.78% to close at $72.21 and $62.76 per barrel respectively even as geopolitical tensions between the United States and Iran continues.

Also, according to Reuters, Saudi Arabian Energy Minister Khalid al-Falih said there was consensus among the Organization of the Petroleum Exporting Countries (OPEC) and other oil producers to reduce crude inventories slowly.

 

Fixed Income

Bond: FGN

The Bond Market closed on a bullish note last week as average yields fell by 11bps to close the week at 13.95% due to continuous reduction seen on short term securities (T-bills) during the week. Yield fell across most maturities, notable includes 2020 (-54bps) and 2021 (-44bps). The following activities are expected to shape market activities during the week:

·         Decision at the CBN Bi-monthly Monetary Policy Committee Meeting is set to hold between Monday and Tuesday, 20 – 21 May 2019.

·         Q1 2019 GDP Report

·         Bond Auction, which is expected to hold on Wednesday, 22 May 2019

 

We expect market participants to remain cautious in the early part of the week.

Secondary Market

Proshare Nigeria Pvt. Ltd.

Source: Anchoria AM Research, FMDQ OTC

 

Treasury Bills

Due to relatively buoyant liquidity coupled with an absence of OMO auction, secondary treasury bills market closed on a bullish note last week. Average yield fell by 78bps to close at 12.14% from 12.14% in previous week.

 

Secondary Market

Proshare Nigeria Pvt. Ltd.

Source: Anchoria AM Research, FMDQ OTC

Proshare Nigeria Pvt. Ltd.

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


Proshare Nigeria Pvt. Ltd.


Related News

1.       The Bulls Sustain Hold On The T-Bills Market As CBN Halts OMO Auctions; Average Yields Down to 12.3%

2.      T-Bill Rates Decline Further in Absence of CBN OMO Auction

3.      FBNQuest Merchant Bank Shares Insights on Accessing Commercial Papers in Nigeria

4.      Invest in FGN Monthly Bond Auction – May 2019

5.      Escalating US-China Trade Tensions Weigh on Market Sentiments

6.      Money Market Rate Increased As The Overnight Rate Rose To 10% From 5.93%

7.      Strong Buying Interest Depressed Average T-Bills Yield Further To 12.9% As OMO Stop Rates Dip

8.     Bond Market Reacts Positively to CBN Governor Tenure Renewal

9.      NSE Lists NSP-SPV Powercorp Green Infrastructure Bonds

10.  Fixed Income Monthly Update April 2019 - Is This A Good Time To Test the Eurobond Waters?

11.   Average T-Bills Yield Closes Flat at 13.1%

12.  May 2019 FGN Savings Bonds Offer for Subscription

 

Proshare Nigeria Pvt. Ltd.

READ MORE:
Related News
SCROLL TO TOP