Culled—Proshare

May 6, 2019/Anchoria AM Research

Money Market

The money market rate fell significantly last week as the Overnight rate (OVN) and Open Buy Back (OBB) fell to 5.93% and 5.29% from 17.29% and 16.43% respectively. Consequently, the average money market rate fell by 11.25% to settle at 5.61%. Major inflow for the week included: OMO Maturity of cN62.80bn, FAAC Disbursement of cN350bn while major outflow for the week included: Weekly Wholesale, Invisible and SME FX auction of $210mn. The system liquidity is estimated at cN250bn at the end of the week.

With the expectation of renewed mopping activities this week, we expected the money market rates to inch upward marginally. 

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 inched slightly up by 1 kobo to close at N360.65/$ due to decrease in market turnover rate by 42.33% week-on-week to $692mn from $1.20bn in previous week However, Naira at the parallel market rose by 0.28% to close at N361.00/$ (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.

Source: Anchoria AM Research, FMDQ OTC

Commodities

Brent Crude Oil and WTI Crude Oil fell by 1.80% and 2.15% to close at $70.85 and $61.94 per barrel respectively due to increased in US Oil inventories and an easing of supply concerns as speculation that Saudi Arabia and its allies would increase output to make up any shortfalls from the expanded sanctions against Iran.

We expect traders to factor in the trade tension between China and US this week.

Fixed Income

Bond: FGN

The Bond Market closed on a slightly bullish note last week as average yields fell by 2bps to close the week at 14.27%. We observed mixed activities on different tenors as 2034 and 2023 bonds witnessed pronounced sell off during the week while 2020 and 2049 bonds witnessed some demand. 

We expect market participants to trade cautiously this week as they monitor the direction of short-term government instruments (T-bills and OMO).

Secondary Market

Source: Anchoria AM Research, FMDQ OTC 

Treasury Bills

The secondary treasury bills market closed on a flat note last week despite a relatively buoyant liquidity. Average yield closed at 13.13% from 13.12% in previous week. This is due to T-bills Primary Market auction that held during the week and as Investors anticipated renews OMO auction because of the buoyant liquidity during the week

Secondary Market

Source: Anchoria AM Research, FMDQ OTC

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