Bonds & Fixed Income | |
Bonds & Fixed Income | |
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Monday, February 11, 2019 03:48 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 11.86% and 11.07% respectively. Consequently, the average money market rate rose by 7.58% to settle at 19.05% due to the decrease in the System liquidity to negative figure of cN128bn from N666bn in the previous week. Major inflow for the week included: OMO repayment of cN315bn while Outflow for the week included: OMO sales of cN643bn; and Weekly Wholesale, Invisible and SME FX auction of $210mn.
We
expect the rate to close higher this week barring any significant inflow as CBN
prepared for another round of FX auction on Monday and anticipated OMO auctions
during the week.
Instrument |
01/02/2019 |
08/02/2019 |
Change |
OBB |
11.07% |
18.67% |
+7.60% |
OVN |
11.86% |
19.42% |
+7.56% |
Source: Anchoria
AM Research, FMDQ OTC
Forex: USD/NGN
The CBN Official rate continued its downward trend to close at N306.70/$, a 0.02% decrease. Also, the rate in the Investors and Exporters’ FX Window fell by 0.27% to close at N361.73/$. We observed an increase in the market turnover in the I&E Window to $1.67 billion during the week from $0.81 billion in the previous week. However, Naira at the parallel market remained unchanged to close at N361.00/$ (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.
01/02/2019 |
08/02/2019 |
Change |
|
CBN
Official Rate |
306.75 |
306.70 |
-0.02% |
I&E
FX Window |
362.71 |
361.73 |
-0.27% |
Everdon
BDC Rate |
361.00 |
361.00 |
+0.00% |
Source: Anchoria
AM Research, FMDQ OTC
Commodities
The Brent Crude Oil and WTI Crude Oil fell by 1.04% and 4.60% to close
at $62.10 and $52.72 per barrel respectively due to the following factors:
a)
Increase
in the number of oil rigs in US
b)
Threat
to increase tariff by the US government on Chinese Goods
Fixed Income
Bond:
FGN
The Bond Market closed on a bullish note last week with increased demand seen on most maturities during the week. Notable amongst them include 2021s (49bps) and 2037s (49bps). Average yields fell by 23bp to close the week at 14.68%. This is due to increased inflow from offshore.
However,
we expect the market to be relatively quiet this week as investors remain
cautious ahead of the General Elections on Saturday.
Secondary
Market
Source:
Anchoria AM Research, FMDQ OTC
Treasury
Bills
Due to reduction in system liquidity during the week, the treasury bills market traded on a bearish note. Consequently, the average yield rose by 21bps to close the week at 14.61%.
The
CBN is scheduled to have its Primary Market Auction for Treasury Bills on
Wednesday, 13 February 2019. The CBN is expect to rollover the same of bills
maturing.
Secondary
Market
Source:
Anchoria AM Research, FMDQ OTC
Anchoria Research: +234 908 720
6076; research@anchoriaam.com
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