Financial Markets Today

Financial Markets Today

Crude oil prices appreciated today, rising ca 1% during trade as a Reuters Survey of crude oil output for February, indicated a 2nd consecutive month of decline in output from the Organisation of Petroleum Exporting Countries (OPEC). Crude oil output dropped to a 4-year low, dropping ca 300,000 barrels per day in February. This comes as trade negotiations between the world’s largest economies, U.S. and China appear close to deal that could reverse tariffs on ca $250 billion of imports from either countries. Yields on government treasuries in develop economies declined today, on increased investors’ interest after the Chinese government lowered its 2019 GDP growth rate forecast to 6% – 6.5%, lower than the 6.6% achieved in 2018, its slowest pace since 1990. The drop in the economic growth outlook for the world’s 2nd largest economy can be attributed to continued uncertainties of the U.S./China trade negotiations, with tariffs on ca $200 billion of Chinese exports to the U.S. still in place for most of Q1, with increasing negative impact on the Chinese economy.

 

We expect the continued negative impact of current U.S/China trade uncertainties on the Chinese economy will further spur new domestic stimulus by the Chinese government to improve domestic demand and economic activities in the world’s 2nd largest economy. We also expect this to further increase investors’ uncertainties of global growth in 2019.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Banking system liquidity opened on a positive note today, at ca ₦279.50bn. There was an Open Market Operation (OMO) auction conducted by the Central Bank of Nigeria (CBN) today.

Treasury Bills
A relatively quiet trading day in the treasury bills secondary market, with the Central Bank (CBN) conducting an Open Market Operation (OMO) auction. Average rates gained ca +24bps day-on-day, with the 05 September maturity trading the most to close at 12.97% from 11.95%. Please find below a summary of the results of the OMO auction held today:

Tenor 100-Days 184-Days
Maturity Date: 13-Jun-19 05-Sep-19
Amount Offered: ₦ 50.00 billion ₦ 100.00 billion
Subscription: ₦ 28.58 billion ₦ 149.33 billion
Amount Allotted: ₦ 28.58 billion ₦ 140.58 billion
Range of bids: 11.8000% – 11.9000% 13.3400% – 13.4800%
Stop Rates 11.9000% 13.4500%

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates dropped day-on-day to 9.33% and 10.42% from 14.00% and 14.92%. 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
A relatively more active trading day in the bonds secondary market today. Average yields rose ca +16bps day-on-day, with the February 2028 maturity trading the most to close at 14.28% from 13.96%.

Equities
The Nigerian equities market gained for a 3rd consecutive trading day, with the Nigerian Stock Exchange All Share Index (NSE ASI) gaining ca +0.14% day-on-day to close at 32,173.66pts, with market’s year-to-date returns at +2.36%. This was largely due to price gains in Guaranty Trust Bank Plc (+1.08%), Zenith Bank Plc (+0.82%) and Stanbic IBTC Holding Plc (+0.22%).

The NSE Consumer Goods and Banking indices both gained ca +25bps and +92bps respectively, while the NSE Oil & Gas and Industrial indices both lost ca -. Diamond Bank Plc led the volume chart with 119.79m units while Zenith Bank Plc led the value chart with trades worth .1.22bn.

The Naira remained stable against the dollar at the interbank market window today, at ₦306.90/$1. In the parallel market, it remained stable against the Dollar, Pound Sterling and Euro at ₦360/$1, ₦470/₤1 and ₦408/€1 respectively. The Naira depreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦360.84/$1 from ₦360.80/$1.

Crude oil prices declined marginally today, on reports of reopening of Libya’s biggest oil field after been shut down since December 2018. Brent crude oil price dropped ca -0.77% at $65.35pb, while WTI crude declined ca -0.88% at $56.06pb, as at report time. Spot gold gained ca +0.08% day-on-day at $1,288.60 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
MCNICHOLS 0.60 0.04 +7.140%
DANGFLOUR 11.00 0.60 +5.77%
UBN 7.00 0.30 +4.48%
NASCON 20.00 0.80 +4.17%
SOVRENINS 0.26 0.01 +4.00%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
REDSTAREX 5.00 -0.50 -9.09%
JAPAULOIL 0.21 -0.02 -8.70%
MBENEFIT 0.25 -0.02 -7.41%
NPFMCRFBK 1.47 -0.11 -6.96%
CAVERTON 2.30 -0.15 -6.12%
Benchmark T-Bills Discount Rates
05-Mar-19 04-Mar-19 Change in Rates
86Days 10.39% 10.39% 0.00%
149Days 12.05% 12.05% 0.00%
338Days 13.64% 13.64% 0.00%
Source: FMDQ DQL for 05 March 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
05-Mar-19 04-Mar-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 14.69% 14.47% 0.22%
5 yrs: 15.54% 27-Apr 2023 14.35% 14.34% 0.01%
10 yrs: 16.29% 17 Mar 2027 14.25% 14.06% 0.19%
20 yrs: 16.25% 18-Apr 2037 14.13% 14.15% -0.02%
Source: FMDQ DQL for 05 March 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.28% 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-19 149 9.70% 10.10%
17-Oct-19 226 12.65% 13.73%
07-Nov-19 247 12.95% 14.19%
16-Jan-20 317 12.60% 14.15%

 

Select Macro-economic Indices
Inflation % (January 2019) 11.37 (-0.61% ytd)
PMI (February 2019) 57.10
MPR (%) 14 (-5%/+2% around mid-point)
CRR (%) 22.5
Brent Crude Price US$ pbbl 65.35 (-0.77% d/d)
External Reserve (US$’billion) 42.32 (-1.86% ytd)
GDP % (Q4 2018) +2.38% (Q3 2018: +1.81% y/y)
NSE All Share Index (ASI) 32,173.66 (+0.14% d/d; +2.36% ytd)
Market Capitalisation (₦’Trillion) 12.00

Financial Markets Update – 05 March 2019

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