N52bn OMO maturity this week to be checked by CBN’s fresh auction
The expected boost in system liquidity this with maturity of the Open market operations (omo) N52 billion, will have little impact as expected Central Bank of Nigeria’s OMO auction will erase impact of the settlement.
This was disclosed by Investment analysts, Investment One in its market performance review of the equities, bond and money markets for the week ended April 21 2017.
“In the coming week, we expect improvement in system liquidity from c.N52bn OMO maturity hitting the system. That said, we however expect the CBN to conduct OMO auction to mop up excess liquidity from the system” the report noted.
Hinging activity in the market this week to be driven by liquidity level, the report pointed that the bond market ended the week on a bearish note as yields increased slightly on most tenors with the exception of JUL2021 and MAR2024.
Yields on the 5yrand 10yr benchmark bonds expanded 25bps and 10bps to 16.12 per cent and 16.19 per cent respectively while yield on the 7yr benchmark bond contracted by 2bps to close at 16.05 per cent.
During the week under review, the fixed income market further showed that both OBB and OVN rates ended the week at 27 per cent and 29 per cent level, from a high of 150 per cent and 140 per cent last week’s Tuesday following inflow from bond maturity.
The 1month, 3month and 6month NIBOR rates also contracted by 36bps, 24bps and 4bps to close at 18.29%, 21.63 per cent and 23.25 per cent level respectively.
At the interbank market currency market, the NGN remained unchanged at the end of the week, closing at N306 against the USD. It however gained +0.37 per cent and +3.41 per cent against the GBP and EUR to close the week at N390.40 and N326.25 respectively.
At the parallel market, the Naira strengthened by 6.1%, 2.0% and 5.7% w/w against the USD , GBP and EUR to close the week at N385, N490 and N410 levels respectively.
In the coming week, we expect NGN performance to see support from FX sales by the apex bank.
