The money market rate rose as the overnight rate fell to 17.42%

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Monday 04 March 2019 11:58 / Anchoria Research

Money Market

The money market rate rose last week as the Overnight Rate (OVN) and Open Buy Back (OBB) fell to 17.42% and 16.33% respectively. As a result, the average money market rate fell by 2.67% to 16.88% due to the increase in system liquidity to 250 billion cN from a negative figure of 180 billion cN. the previous week. Major entries for the week included: OMO maturity of cN 350 billion, coupon payment on the 2028 bond and retail CBN redemption of cN 165 billion while major exits include weekly wholesale auctions $ 210 Million Invisible and FX SME, CN 1.08 trn OMO sale and bi-weekly cN 360 billion currency auction.

We expect the rate to close higher this week, barring a significant influx as the CBN gears up for another round of currency auctions on Monday and for OMO auctions anticipated during the week.

Instrument

02/22/2019

03/01/2019

Switch

OBB

18.83%

16.33%

-2.50%

UFO

20.25%

17.42%

-2.83%

Source: Anchoria AM Research, FMDQ OTC

Forex: USD / NGN

The official CBN rate rose 0.02% to close at N / $ 306.80 while the investor and exporters exchange window rate fell 0.13% to close at N / $ 361.03. $. We have seen an increase in market turnover in the I&E window as market turnover reached an all-time high thanks to the increase in REIT inflows. Likewise, Naira on the parallel market appreciated 0.28% to close at N361.00 / $ (using the Everdon BDC rate).

We expect parallel market rates to remain constant as the umbrella bank continues to provide foreign exchange into the market, coupled with its frequent wholesale and retail SMIS program.

02/22/2019

03/01/2019

Switch

CBN official rate

306.80

306.85

+ 0.02%

I&E FX window

361.49

361.03

-0.13%

Everdon BDC rate

361.00

360.00

-0.28%

Source: Anchoria AM Research, FMDQ OTC

Merchandise

Despite an upbeat trade deal with the United States and China, Brent crude oil and WTI crude oil fell 3.05% and 2.55% to close at $ 65.07 and $ 55.80 per barrel respectively due to President Trump’s comments, while the weekend rally was due in the United States. economic data.

Fixed income

Obligation: FGN

Following the announcement of the presidential election results, the bond market closed on a bullish note with more pronounced demand for 2020 (-199bp) and 2028 (-80bp) bonds. One of the main drivers of the bullish race in the bond space is the increase in foreign portfolio investment (REIT) as foreign investors allocate funds to certain assets in emerging economies. Average yields fell 74 bps to end the week at 13.95%.

We expect the uptrend to continue this week as offshore investors continue to invest more in emerging economies and in the context of the FAAC allocation release.

Secondary market

Source: Anchoria AM Research, FMDQ OTC

Goods of treasure

Due to the increased liquidity in the system during the week, the Treasury bill market traded on a bullish note. As a result, the average yield fell sharply by 1.36% to end the week at 12.98%. The primary market treasury bill auction conducted during the week saw a significant oversubscription rate of 632%, with most of the demand seen on the one-year bill.

Secondary market

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Source: Anchoria AM Research, FMDQ OTC

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