Financial Markets Today
Global financial markets turned positive today, after the release of U.S. jobs and unemployment data for April 2019, indicating non-farm jobs grew by 263,000 in April vs market analysts expectation of 190,000 and above average for previous 3months of 2019 of 164,000 jobs. This also comes as unemployment figure dropped to its lowest in almost 50-years, at 3.60% vs market analyst expectation of 3.8%, further supporting economic growth in the world’s largest economy in Q1 2019, which recorded 3.2%.
With continued positive sentiments of global financial indices, on the back of recently released better-than-expected economic data from the world’s largest economies – U.S., China and the Eurozone area, we expect current dovish monetary stance of Central Banks in Developed Markets (DMs) to be maintained in the near term, to further support the rise in economic activities in DMs, with possible improvement in demand and consumer spending within the economies.
MONEY MARKETS
CAPITAL MARKETS
FOREIGN EXCHANGE
COMMODITIES
Banking system liquidity opened positive today at ca +₦246bn. There was no Open Market Operation (OMO) auction by the Central Bank of Nigeria (CBN) today.
Treasury Bills
The treasury bills secondary market continued bullish today, with demand at the short-to-mid end of the curve, in the absence of Open Market Operation (OMO) auction by the Central Bank Nigeria (CBN). Average rate remained flat day-on-day, with the 31 October 2019 maturity was the most active as it closed at 12.38% from 12.68%.
Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates traded lower day-on-day at 5.29% and 5.93% from 6.14% and 7.29%. Average fixed deposit rates amongst banks monitored showed:
– tier-1 rated banks at 3.00% for 30 – 60 days tenor on ₦10mln – ₦100mln.
– tier-2 rated banks at 7.00% for 30 – 60 days tenor on ₦10mln – ₦100mln.
Bonds
The bonds secondary market ended the week on a quiet note with few trading activities seen on select maturities. Average yields remained flat day-on-day, with the July 2021 maturity closing at 14.82%.
Eurobonds
The nation’s Eurobonds market closed bearish today, with little investor interest across the curve. Average yields gained ca +6bps day-on-day with the January 2049 maturity closing at 8.42% from 8.34%.
Equities
The Nigerian equities market ended the week on a positive note today, with the Nigerian Stock Exchange All Share Index (NSE ASI) gaining ca +0.14% day-on-day to close at 29,212.00pts, and market’s year-to-date returns at -7.06%. This was mainly due to gains in Guaranty Trust Bank Plc (+1.36%) and Seplat Petroleum Development Company Plc (+0.85%)..
The NSE Banking and Industrial indices gained ca +28bps and +28bps respectively, while the NSE Consumer Goods and Oil & Gas indices lost ca -26bps and -41bps respectively. Access Bank Plc led both the volume and value charts with ca 60.39m units traded at ₦414.58mn respectively.
The Naira traded flat against the dollar in both the interbank and parallel markets today at ₦306.95/$1 and ₦360/$1 respectively. It remained flat against the Pound sterling at ₦470/₤1 and appreciated against the Euro at ₦400/€1 in the parallel market. The FMDQ Nigerian Autonomous Foreign Exchange (NAFEX) Fixing rate depreciated against the Dollar at ₦360.54/$1 from ₦360.32/$1.
Oil prices recovered today, on the back of better-than-expected U.S. jobs and unemployment data released today, and on continued U.S. sanctions on Iran and Venezuela. Brent crude oil price gained ca +0.95% day-on-day at $71.42pb, while WTI gained ca +1.02% day-on-day at $62.44pb, as at report time. Spot gold gained ca +0.76% to close at $1,281.70 per ounce.
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| Benchmark T-Bills Discount Rates | ||||
| 03-May-19 | 02-May-19 | Change in Rates | ||
| 90 Days . | 11.08% | 10.35% | 0.73% | |
| 181 Days | 12.38% | 12.60% | -0.22% | |
| 348 Days. | 12.65% | 12.74% | -0.09% | |
| Source: FMDQ DQL for 03 May 2019 *T-Bills Discount Rates are slightly different from current market rates |
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| Benchmark FGN Bond Yields | ||||
| 03-May-19 | 02-May-19 | Change in Yield | ||
| 3 yrs: 16.00% 15-Jul-2021 | 14.82% | 14.81% | 0.01% | |
| 5 yrs: 15.54% 27-Apr 2023 | 14.69% | 14.63% | 0.06% | |
| 10 yrs: 13.98% 17 Mar 2028 | 14.46% | 14.50% | -0.04% | |
| 20 yrs: 16.25% 18-Apr 2037 . | 14.57% | 14.54% | 0.03% | |
| Source: FMDQ DQL for 03 May 2019 | ||||
| Benchmark FGN EuroBond Yields | ||||
| 03-May-19 | 02-May-19 | Change in Yield | ||
| 3 yrs: NGERIA 6 3/4 01/28/21 | 4.90% | 4.85% | 0.05% | |
| 5 yrs: NGERIA 6 3/8 07/12/23 | 5.54% | 5.50% | 0.04% | |
| 10 yrs: NGERIA 6 1/2 11/28/27 | 6.75% | 6.67% | 0.08% | |
| 20 yrs: NGERIA 7.696 02/23/38 | 7.82% | 7.76% | 0.06% | |
| 30 yrs: NGERIA 9.248 01/21/49 | 8.44% | 8.34% | 0.08% | |
| Source: FMDQ DQL for 03 May 2019 | ||||
| AIICO Money Market Fund (AMMF) | |
| Net Yield (As at current date) | 13.14% per annum |
| Added Benefit | Personal accident insurance cover |
| AIICO Capital Guaranteed Income Note (GIN) Rates p.a. | |||||
| Amount (NGN) | 30 Days | 60 Days | 90 Days | 180 Days | 364 Days |
| 10,000,001 – 50,000,000 | 10.00 | 10.50 | 11.00 | 12.00 | 13.00 |
| 50,000,001 – 100,000,000 | 11.00 | 11.25 | 11.50 | 12.50 | 14.00 |
| 100,000,001 – 400,000,000 | 12.00 | 12.25 | 12.50 | 13.00 | 14.50 |
| Trading Treasury Bills Rates p.a. | |||
| Maturity Dates | Tenor (Days) | Discount Rate | Effective Yield |
| 01-Aug-19 | 90 | 9.70% | 9.94% |
| 17-Oct-19 | 167 | 12.15% | 12.87% |
| 07-Nov-19 | 188 | 12.40% | 13.25% |
| 16-Jan-20 | 258 | 12.35% | 13.53% |
| Select Macro-economic Indices | |
| Inflation % (March 2019) | 11.25 (-1.66% ytd) |
| PMI (April 2019) | 57.70 |
| MPR (%) | 13.5 (-5%/+2% around mid-point) |
| CRR (%) | 22.5 |
| Brent Crude Price US$ pbbl | 71.42 (+0.95% d/d) |
| External Reserve (US$’billion) | 44.792 (+2.27% ytd) |
| GDP % (Q4 2018) | +2.38% (Q3 2018: +1.81% y/y) |
| NSE All Share Index (ASI) | 29,212.00 (+0.14% d/d; -7.06% ytd) |
| Market Capitalisation (₦’Trillion) | 10.98 |
Financial Markets Update – 03 May 2019
Important Disclaimers
This document has been issued and approved by AIICO Capital and is based on information from various sources that we believe are reliable. However, no representation is made that it is accurate or complete. While reasonable care has been taken in preparing this document, no responsibility or liability is accepted for errors or fact or for any opinion expressed herein. This document is for information purposes only. It does not constitute any offer or solicitation to any person to enter into any trading transaction.
Investments discussed in this report may not be suitable for all investors. This report is provided solely for the information of AIICO Capital clients who are then expected to make their own investment decisions. AIICO Capital conducts designated investment business with market counter parties and customers and this document is directed only to such persons. AIICO Capital accepts no liability whatsoever for any direct or consequential loss arising from any use of this report or its contents. This report is for private circulation only and may not be reproduced, distributed or published by any recipient for any purpose without prior express consent of AIICO Capital. Users of this report should bear in mind that investments can fluctuate in price and value. Past performance is not necessarily a guide to future performance.
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