Financial Markets Today
Global crude oil prices rallied to their highest in 2019 today, reaching its highest levels in 5-months, with Brent crude oil price rising to ca $69.50 per barrel on expected improved supply cuts by the Organisation of Petroleum Exporting Countries (OPEC). This comes as a Reuters survey indicated that crude oil supply from OPEC in March 2019 declined to its lowest in 4-years on the back of higher-than-expected supply cuts by OPEC’s largest oil exporter – Saudi Arabia and involuntary supply cuts due to rising impact of sanctions on Venezuela and Iran.
With recent improved tone from the Presidents of both U.S. and China, and expected push for a quick resolution to the current trade negotiations between both countries, we expect further rise in investors positive sentiments of global equities market in the near term.
MONEY MARKETS
CAPITAL MARKETS
FOREIGN EXCHANGE
COMMODITIES
Banking system liquidity was expected to open on a positive note today. There was no Open Market Operation (OMO) auction today by the Central Bank of Nigeria
(CBN).
Treasury Bills
A bullish trading day in treasury bills secondary market today with renewed investors interest. Average yields shed ca -6bps day-on-day, with most activities seen on short-to-mid dated maturities. The 20 June maturity traded most to close at 10.42% from 10.68%.
Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates dropped day-on-day to 15.29% and 16.14% from 19.71% and 20.86%, respectively. 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 7.50% for 30 – 60 days tenor on ₦10mln – ₦100mln.
Bonds
The bonds secondary market ended the week on a bearish note with some sell offs seen across the curve. The Debt Management Office (DMO) released the Q2 Bonds issuance calendar which showed a maximum offering of ca ₦345 billion and 2 new maturities on offer – a 10year April 2029 and 30year April 2049. Average yields gained ca +4bps day-on-day with most of the day’s trading activities seen on the March 2025 maturity which traded the most to close at 14.40% from 14.31%.
Eurobonds
A quiet end to the week in the nations Eurobonds market today with average yields shedding ca -1bps day-on-day. Most activities was seen at the short-end of the curve with the January 2021 closing at 4.88% from 4.91%.
Equities
The Nigerian equities market appreciated today after 4 consecutive days of losses, as the Nigerian Stock Exchange All Share Index (NSE ASI) gained ca +0.21% day-on-day to close at 29,616.38pts, with market’s year-to-date returns at -5.77%. This was majorly on the back of gains in mid-cap stocks as Dangote Flour Mills Plc (-6.88%) and Dangote Sugar Refinery Plc (-1.09%).
The NSE Banking, Consumer Goods and Industrial indices all gained ca +33bps, +17bps and +119bps respectively, while the NSE Oil & Gas index remained flat. Sterling Bank Plc led the volume chart with 59.87m units while Guaranty Trust Bank Plc led the value chart with ca ₦1.32bn worth of trades.
The Naira remained stable against the dollar in both the interbank and parallel markets today, at ₦306.95/$1 and ₦360/$1 respectively. It was also stable against the Pound sterling and the Euro at ₦475/₤1 and ₦405/€1 respectively, in the parallel market. In the Nigerian Autonomous Foreign Exchange (NAFEX) window, Naira depreciated marginally against the Dollar at ₦360.42/$1.
Global crude oil prices gained further today, and set for the longest weekly gains since November 2017 amid concerns over supply shortfalls from Venezuela and Libya, and rising optimism of U.S./China trade deal. Brent crude oil price gained ca +0.56% at $69.79pb, while WTI gained ca +0.76% at $62.57pb, as at report time. Spot gold gained ca +0.12% to close at $1,295.90 from $1,294.30 per ounce.
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Benchmark T-Bills Discount Rates | ||||
| 05-Apr-19 | 04-Apr-19 | Change in Rates | ||
| 62Days . | 11.71% | 11.92% | -0.21% | |
| 153Days- | 13.13% | 13.18% | -0.05% | |
| 328Days. | 12.92% | 12.92% | 0.00% | |
| Source: FMDQ DQL for 05 April 2019 *T-Bills Discount Rates are slightly different from current market rates |
||||
| Benchmark FGN Bond Yields | ||||
| 05-Apr-19 | 04-Apr-19 | Change in Yield | ||
| 3 yrs: 16.00% 15-Jul-2021 | 14.40% | 14.44% | -0.04% | |
| 5 yrs: 15.54% 27-Apr 2023 | 14.31% | 14.31% | 0.00% | |
| 10 yrs: 16.29% 17 Mar 2027 | 14.46% | 14.53% | -0.07% | |
| 20 yrs: 16.25% 18-Apr 2037 . | 14.32% | 14.38% | -0.06% | |
| Source: FMDQ DQL for 05 April 2019 | ||||
| Benchmark FGN EuroBond Yields | ||||
| 05-Apr-19 | 04-Apr-19 | Change in Yield | ||
| 3 yrs: NGERIA 6 3/4 01/28/21 | 4.88% | 4.91% | -0.03% | |
| 5 yrs: NGERIA 6 3/8 07/12/23 | 5.47% | 5.48% | -0.01% | |
| 10 yrs: NGERIA 6 1/2 11/28/27 | 6.67% | 6.68% | -0.01% | |
| 20 yrs: NGERIA 7.696 02/23/38 | 7.74% | 7.75% | -0.01% | |
| 30 yrs: NGERIA 9.248 01/21/49 | 8.25% | 8.26% | -0.01% | |
| Source: FMDQ DQL for 05 April 2019 | ||||
| AIICO Money Market Fund (AMMF) | |
| Net Yield (As at current date) | 13.68% 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 | 118 | 11.70% | 12.16% |
| 17-Oct-19 | 195 | 12.60% | 13.51% |
| 07-Nov-19 | 216 | 12.65% | 13.67% |
| 16-Jan-20 | 286 | 12.55% | 13.92% |
| Select Macro-economic Indices | |
| Inflation % (February 2019) | 11.31 (-1.14% ytd) |
| PMI (March 2019) | 57.40 |
| MPR (%) | 14 (-5%/+2% around mid-point) |
| CRR (%) | 22.5 |
| Brent Crude Price US$ pbbl | 69.79 (+0.56% d/d) |
| External Reserve (US$’billion) | 44.648 (+3.55% ytd) |
| GDP % (Q4 2018) | +2.38% (Q3 2018: +1.81% y/y) |
| NSE All Share Index (ASI) | 29,616.38 (-0.21% d/d; -5.77% ytd) |
| Market Capitalisation (₦’Trillion) | 11.12 |
Financial Markets Update – 05 April 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.
AIICO Capital is regulated by the Securities and Exchange Commission, and is licensed to provide fund and portfolio management services in Nigeria.
