Financial Markets Today
The Chinese equities market crashed today, losing ca 5.5% on the first trading day of the week, after the U.S. President – Donald Trump, threatened to increase current tariffs on ca $200 billion worth of Chinese exports to the U.S. from 10% to 25%. This re-escalated trade tensions between the U.S. and China and comes as the world’s largest economies are set to meet for new rounds of trade negotiations this week. Other global equity indices also declined with the U.S. Dow Jones Industrial Average (DJIA), S & P 500, NASDAQ, German DAX, French CAC and Japanese NIKKEI all declined ca -0.25%, -0.45%, -0.50%, -1.01%, -1.18% and -0.22% respectively.
We expect continued volatility in global equities market this week and in the near term, on continued uncertainties of global economic growth and possible further escalation of U.S./China trade tensions. We also expect this to keep Brent crude oil price volatile in the near term.
MONEY MARKETS
CAPITAL MARKETS
FOREIGN EXCHANGE
COMMODITIES
Banking system liquidity was expected to open positive today, on the back of Statutory allocations credited late on Friday. There was an Open Market Operation (OMO) auction by the Central Bank of Nigeria (CBN) today.
Treasury Bills
The treasury bills secondary market opened on a bullish note today, with demand on the short-to-mid dated maturities fueled by improved interbank liquidity from the monthly statutory revenue allocations. Average yields trended downwards shedding ca -6bps day-on-day, with the 20 June 2019 paper trading the most to close at 10.03% from 10.18%. Please find below a summary of the result of today’s Open Market Operations (OMO) auction:
| Tenor | 108-Days | 199-Days | 353-Days |
| Maturity Date: | 22-Aug-19 | 21-Nov-19 | 23-Apr-20 |
| Amount Offered: | ₦100.000 billion | ₦50.000 billion | ₦150.000 billion |
| Subscription | ₦26.330 billion | ₦22.840 billion | ₦364.300 billion |
| Amount Allotted: | ₦26.330 billion | ₦21.030 billion | ₦265.020 billion |
| Range of bids | 11.6000% – 11.8000% | 12.7300% – 12.9000% | 12.8700% – 13.0100% |
| Stop Rate | 11.8000% | 12.8800% | 12.9400% |
Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates traded higher day-on-day at 11.36% and 12.07% from 5.29% and 5.93%. 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 commenced the week on a quiet note with few trading activities on some maturities. Average yields remained flat day-on-day, with the April 2049 maturity closing at 14.66%.
Eurobonds
The nations Eurobonds market kicked off the week bullish today, with investors interest seen across the curve. Average yields shed ca -3bps day-on-day with the January 2049 maturity closing at 8.36% from 8.42%.
Equities
The Nigerian equities market closed negative today, with the Nigerian Stock Exchange All Share Index (NSE ASI) shedding ca -0.04% day-on-day to close at 29,197.87pts, and market’s year-to-date returns at -7.10%. This was mainly due to losses in Guaranty Trust Bank Plc (-1.35%) and Zenith Bank Plc (-0.48%).
The NSE Banking, Oil & Gas and Industrial indices shed ca -68bps, -15bps and -53bps respectively, while the NSE Consumer Goods index gained ca +10bps. Japaul Oil Plc led the volume chart with 58.61m and United Bank for Africa Plc led the value chart with ₦244.78mn.
The Naira traded flat against the dollar in both the interbank and parallel markets today at ₦306.95/$1 and ₦360/$1 respectively. It also remained flat against the Pound sterling and the Euro at ₦470/₤1 and ₦400/€1 respectively in the parallel market. The FMDQ Nigerian Autonomous Foreign Exchange (NAFEX) Fixing rate depreciated against the Dollar at ₦360.65/$1 from ₦360.54/$1.
Oil prices traded higher today, after a very volatile opening session, on the back of rising tensions between U.S. and Iran, and possible re-escalation of U.S./China trade tension. Brent crude oil price gained ca +1.20% day-on-day at $71.70pb, while WTI gained ca +1.28% day-on-day at $62.73pb, as at report time. Spot gold gained ca +0.02% to close at $1,281.50 per ounce.
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| Benchmark T-Bills Discount Rates | ||||
| 06-May-19 | 03-May-19 | Change in Rates | ||
| 87 Days | 10.25% | 11.08% | -0.83% | |
| 178 Days | 12.50% | 12.38% | 0.12% | |
| 346 Days. | 12.63% | 12.65% | -0.02% | |
| Source: FMDQ DQL for 06 May 2019 *T-Bills Discount Rates are slightly different from current market rates |
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| Benchmark FGN Bond Yields | ||||
| 06-May-19 | 03-May-19 | Change in Yield | ||
| 3 yrs: 16.00% 15-Jul-2021 | 14.80% | 14.82% | -0.02% | |
| 5 yrs: 15.54% 27-Apr 2023 | 14.73% | 14.69% | 0.04% | |
| 10 yrs: 13.98% 17 Mar 2028 | 14.50% | 14.46% | 0.04% | |
| 20 yrs: 16.25% 18-Apr 2037 . | 14.63% | 14.57% | 0.06% | |
| Source: FMDQ DQL for 06 May 2019 | ||||
| Benchmark FGN EuroBond Yields | ||||
| 06-May-19 | 03-May-19 | Change in Yield | ||
| 3 yrs: NGERIA 6 3/4 01/28/21 | 4.97% | 4.90% | 0.07% | |
| 5 yrs: NGERIA 6 3/8 07/12/23 | 5.55% | 5.54% | 0.01% | |
| 10 yrs: NGERIA 6 1/2 11/28/27 | 6.70% | 6.75% | -0.05% | |
| 20 yrs: NGERIA 7.696 02/23/38 | 7.77% | 7.82% | -0.05% | |
| 30 yrs: NGERIA 9.248 01/21/49 | 8.36% | 8.44% | -0.06% | |
| Source: FMDQ DQL for 06 May 2019 | ||||
| AIICO Money Market Fund (AMMF) | |
| Net Yield (As at current date) | 13.15% 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 | 87 | 9.95% | 10.19% |
| 17-Oct-19 | 164 | 12.20% | 12.91% |
| 07-Nov-19 | 185 | 12.20% | 13.00% |
| 16-Jan-20 | 255 | 12.35% | 13.52% |
| 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 | 71.70 (+1.20% 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) | 29,197.87 (-0.04% d/d; -7.10% ytd) |
| Market Capitalisation (₦’Trillion) | 10.97 |
Financial Markets Update – 06 May 2019
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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.
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