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Proshare Forecasts Money Market Rates’ Upswing, TB Yields’ Slide

Proshare Nigeria Limited, Nigeria’s leading investment research firm, has projected sustained edge in money market rates this week even as it forecasts that yields from Treasury Bill (TB) investments may slide when compared with investors’ yields last week.

The research firm, in its market outlook report for this week, noted that as at close of trading last Friday, the currency market witnessed a mixed direction at the I & E FX window and the NAFEX window.

According to the analysts, during the Friday trading session, the naira closed at N417.14/USD at the Nigerian Autonomous Foreign Exchange Fixing (NAFEX), indicating a week-on-week (W-on-W) appreciation of -0.07%, and closed at N419/USD at the Investor and Exporter FX market, depreciating by +0.48%

On the Money Market trading results, the firm’s experts reported that the rate increased at the end of last week due to depressed liquidity in the market, closing on Friday with the open repo rate (OPR) rising to 8.67 and overnight rates (O/N) also rose to 9.17, indicating a W-o-W rise of +82.53 and 86.38% respectively.

Proshare projected that the rate would “edge higher in the coming week with liquidity expectations in the system.”

Reflecting on the Treasury Bills market trend last week, the firm’s researchers recalled that the TB market was bullish at the close of trading last week with the average benchmark closing at 3.52 and the yields falling to (w-o-w) -5.38%.

Specifically, Proshare reported that at the close of trading on Friday, the OMO bills saw some buying interest with the average benchmark settling at 3.87 and the yield declining by -1.53%.

On their expectations from the market this week, the experts stated: “We expect yields to further decline with the liquidity expectation from bond auctions this coming week.

They further recalled that last week, the FGN Bond Market closed bullish with some buying interest in the short and long end of the curve as the overall average benchmark yield closed at 11.57, benchmark average yield dipped by -0.34%

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