Financial Markets Today

Financial Markets Today

Yields of treasuries in developed economies (DMs), which move inversely to price, dropped today with the U.S. 10yr treasury losing ca -2.36% day-on-day, of the back of increased risk off sentiments and investors’ reaction to higher uncertainties of global trade tensions. This comes after yesterday’s comments by the U.S. President – Donald Trump, of a protracted trade negotiation between the world’s largest economies. Price of safe-haven risk assets rose on increased demand by investors for safe-haven assets with price of Gold rising nearly +1% day-on-day, while global equites benchmark indices declined further today.

We expect continued escalation of global trade tensions to further spur investors interest in safe-haven assets for most of Q3 2019, as increasing concerns of significant negative impact of global trade tensions on growth in developed economies is expected to spur implementation of new stimulus packages and possible rate cuts in July, by Apex Banks of Developed Economies (DMs).

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Banking system liquidity opened positive today at ca ₦260bn lower than ₦348bn it opened at yesterday. The Central Bank of Nigeria (CBN) did not conduct an Open Market Operation (OMO) auction today.

Treasury Bills
The treasury bills secondary market traded mixed sentiments in the early trading hours today, as market anticipated closing levels of the primary market auction. However, the market ended on a bullish note with demand on the mid-to-long dated papers. Average yields shed ca -7bps day-on-day with the 26 December 2019 maturity closing at 10.14% from 10.19%. Please find below a summary of the results of the auction:

Tenor 91-Days 182-Days 364-Days
Maturity Date: 17-Oct-19 16-Jan-20 16-Jul-20
Amount Offered: ₦5.849 billion ₦26.600 billion ₦74.598 billion
Subscription ₦29.153 billion ₦69.628 billion ₦374.767 billion
Amount Allotted: ₦5.849 billion ₦26.600 billion ₦74.598 billion
Range of bids 9.0000% – 11.0000% 10.2500% – 12.0000% 10.7000% – 12.5000%
Stop Rate 9.7400% 10.7500% 11.1390%

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates traded higher day-on-day at 3.86% and 4.50% from 2.50% and 3.07%. 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 continued on a bullish note today, with specific demand at the mid and long end of the curve. Average yields shed ca -5bps day-on-day with the February 2028 paper closing at 13.62% from 13.68%.

Eurobond

The nation’s Eurobonds market traded on a bullish note today, with some demand on the short-to-mid end of the curve. Average yields marginally trended downwards, shedding ca -3bps day-on-day with the November 2027 paper closing at 6.27% from 6.21%.

Equities
The Nigerian equities market continued on a negative note today, with the Nigerian Stock Exchange All Share Index (NSE ASI) marginally shedding ca -0.56% day-on-day to close at 28,042.80pts, and market’s year-to-date returns at -10.78%. This was due to losses in StanbicIBTC Bank Plc (-1.27%), Guaranty Trust Bank Plc (-1.02%) and Zenith Bank Plc (-0.80%).

The NSE Banking, Oil & Gas, Consumer goods and Industrial indices all lost ca -144bps, -5bps, -77bps and -68bps respectively. Guaranty Trust Bank Plc led both the volume and value charts with ca 77.51m units and ca ₦2.27bn worth of trades.

The Naira was unchanged day-on-day against the dollar in the interbank and parallel markets at ₦306.95/$1 and ₦360/$1 respectively. In the parallel market, it appreciated against the Pound Sterling and the Euro at ₦462/₤1 and ₦405/€1 from ₦463/₤1 and ₦406/€1 respectively. The FMDQ Nigerian Autonomous Foreign Exchange (NAFEX) Fixing rate appreciated day-on-day at ₦361.02/$1 from ₦361.04/$1.

Crude oil prices declined further today, after reports released by the Energy Information Administration (EIA) showed U.S. gasoline inventories rose ca 3.6 million barrels week-on-week, offsetting reported ca 3.1 million barrels drop in shale crud stock pile. Brent crude oil price shed ca -0.42% day-on-day at $64.08pb, while WTI shed ca -0.68% day-on-day at $57.23pb, as at report time. Spot gold gained ca +0.85% at $1,423.20 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
AGLEVENT 0.33 0.03 +10.00%
CHAMS 0.27 0.02 +8.00%
MBENEFIT 0.21 0.01 +5.00%
COURTVILLE 0.22 0.01 +4.76%
CHIPLC 0.31 0.01 +3.33%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
JBERGER
18.00 -1.95 -9.77%
NAHCO 2.35 -0.25 -9.62%
UNITYBNK 0.59 -0.06 -9.23%
MANSARD 1.65 -0.15 -8.33%
HONYFLOUR 0.92 -0.07 -7.07%
Benchmark T-Bills Discount Rates
  17-Jul-19 16-Jun-19 Change in Rates
85 Days                                       9.86% 9.91% -0.05%  
176 Days- 10.53% 10.49% 0.04%  
330 Days. 11.10% 11.10% 0.00%  
Source: FMDQ DQL for 17 July 2019
Benchmark FGN Bond Yields
  17-Jul-19 16-Jul-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 13.69% 12.76% 0.93%  
5 yrs: 15.54% 27-Apr 2023 13.23% 13.47% -0.24%  
10 yrs: 13.98% 23-Feb 2028 13.62% 13.68% -0.06%  
20 yrs: 16.25% 18-Apr 2037 14.05% 14.05% 0.00%  
30 yrs: 14.80% 26-Apr 2049 14.10% 14.11% -0.01%  
Source: FMDQ DQL for 17 July 2019
Benchmark FGN EuroBond Yields
  17-Jul-19 16-Jul-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.02% 3.99% 0.03%  
5 yrs: NGERIA 6 3/8 07/12/23 4.65% 4.67% -0.02%  
10 yrs: NGERIA 6 1/2 11/28/27 6.21% 6.27% -0.06%  
20 yrs: NGERIA 7.696 02/23/38 7.42% 7.46% -0.04%  
30 yrs: NGERIA 9.248 01/21/49 7.97% 7.98% -0.01%  
Source: FMDQ DQL for 17 July 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.02% 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
29-Aug-19 43 7.75% 7.82%
17-Oct-19 92 8.85% 9.05%
07-Nov-19 113 9.55% 9.84%
16-Jan-20 183 10.10% 10.64%
Select Macro-economic Indices
Inflation % (Jun 2019) 11.22 (-0.18% ytd)
PMI (June 2019) 57.40
MPR (%) 13.5 (-5%/+2% around mid-point)
CRR (%) 22.5
Brent Crude Price US$ pbbl 64.08 (-0.42% d/d)
External Reserve (US$’billion) 45.113 (+1.40% ytd)
GDP % (Q1 2019) +2.01% (Q4 2018: +2.38% y/y)
NSE All Share Index (ASI) 28,042.80 (-0.56% d/d; -10.78% ytd)
Market Capitalisation (₦’Trillion) 13.66

Financial Markets Update – 03 JULY 2019

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