Money Market Rate Increased As Overnight Rate Rose To 11.86%

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

Proshare Nigeria Pvt. Ltd.

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

Proshare Nigeria Pvt. Ltd.

Source:
Anchoria AM Research, FMDQ OTC

 

Proshare Nigeria Pvt. Ltd.

Anchoria Research: +234 908 720
6076;  [email protected]

 

Proshare Nigeria Pvt. Ltd.

Related News

1.       Flour Mills Commercial Paper Offers 14.75% Yield; Offer
Closes On Wednesday

2.      Monthly Fixed Income Review For January 2019

3.      Bond Market Maintains Bullish Trend as Panic Buying Sets
In

4.      NAFEX Rate Appreciates to Six Month High Amid Renewed FPI
Inflows

5.      A Quiet Trading Session as Daily OMO Auction Takes Centre
Stage

6.      Market Players Oversubscribe CBN OMO Amid Increased
Demand on Short Tenor Bills

7.      NSP-SPV Plc Up to N10Billion 15-Year Series 1 Guaranteed
Fixed Rate Senior Green Infrastructure Bond

8.     Buoyant Liquidity Level Spurs Buying Interest as Average
Yield Compresses to 13.2%WoW

9.      Bond Market Closed On A Bullish Note With Increased
Demand Seen On Most Maturities

10.  February 2019 FGN Savings Bonds Offer For Subscription

11.   Bond Yields Break Key Support amid Renewed Offshore
Interests

12.  Massive Rally on Eurobonds as US FED Strikes Dovish Tone

 Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.