Financial Markets Today

Financial Markets Today

Yields in the domestic debt market declined sharply today, with maturities at the long-end of the curve dropping ca 20bps – 32bps to ca 14.40% levels on the April 2037 maturity. This can be attributed to a rise in demand from both local and foreign investors (FPIs) for government bond securities, as inflows from FPIs through the Investors and Exporters FX (I & E FX) window rose to ca $1.3 billion in January 2019 vs $0.459 billion in December 2018.

We expect a rise in volatility of fixed income yields as we head into the week of general elections, and with the Central Bank (CBN) maintaining its tight liquidity stance through the conduct of Open Market Operations (OMO) auctions to reduce banking system liquidity.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Banking system liquidity opened negative today, at ca -₦127.81bn. There was no Open Market Operation (OMO) auction conducted by the Central Bank of Nigeria (CBN).

Treasury Bills
A relatively less active trading day in the treasury bills secondary market, with most activities still majorly focused at the short-end of the curve. The 07 March 2019 maturity traded the most to close at 10.66%, with average rate dropping ca -7ps day-on-day.

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates rose to 18.67% and 19.42% from 17.33% and 18.42%. 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
A very active trading day in the bonds secondary market today, with demand seen across the curve, particularly on the long dated maturities. The March 2036 maturity remained the most traded to close at 14.61% from 14.81% with average yields dropping ca -6bps dayon-day

Equities
The Nigerian equities market rallied for a 6th consecutive trading day, on the back of gains in highly capitalized as Guaranty Trust Bank Plc (+1.71%), Nestle Nigeria Plc (+2.04%) and Stanbic IBTC Holding Plc (+0.21%). The Nigerian Stock Exchange All Share Index (NSE ASI) gained ca +0.31% day-on-day to close at 31,529.92pts, with market’s year-to-date returns at +0.32%.

The NSE Oil & Gas, Consumer Goods and Banking indices all gained ca +257bps, +123bps and +121bps respectively day-on-day, while the NSE Industrial index lost ca 173bps. Zenith Bank Plc led the volume and value charts with 147.03m traded at ₦3.67bn.

The Naira remained stable against the dollar at the interbank market window today, at ₦306.70/$1. In the parallel market, it also remained stable against the Dollar, Pound Sterling and Euro at ₦361/$1, ₦473/₤1 and ₦411/€1 respectively. The Naira depreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦361.54/$1 from ₦361.49/$1.

Crude oil prices recovered some of yesterday’s losses today, supported by reports of further production cuts of ca 400,000 barrels per day by Saudi Arabia to 10.24 million barrels per day vs 10.64 million barrels per day. Brent crude oil price gained ca +0.29% at $61.81pb, while WTI crude rose ca +0.11% at $52.71pb, as at report time. Spot gold rose ca +0.28% day-on-day at $1,317.90 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
NEM 2.50 0.20 +8.70%
NPFMCRFBK 1.55 0.12 +8.39%
UPL 2.34 0.18 +8.33%
MCNICHOLS 0.41 0.03 +7.89%
DANGFLOUR 6.85 0.50 +7.87%
Top 5 Equity Decliners
Name (Symbol) Closing Price Loss(N) % Change
INTERLINK 3.24 -0.36 -10.00%
ETRANZACT 2.93 -0.32 -9.85%
CHIPLC 0.27 -0.02 -6.90%
CORNERST 0.20 -0.01 -4.76%
NAHCO 3.35 -0.14 -4.01%
Benchmark T-Bills Discount Rates
08-Feb-19 07-Feb-19 Change in Rates
83Days 11.10% 11.08% 0.02%
174Days 13.08% 13.23% -0.15%
307Days 14.95% 14.95% 0.00%
Source: FMDQ DQL for 08 February 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
08-Feb-19 07-Jan-19 Change in Yield
3 yrs: 16.00% 29-Jun 2019 13.38% 13.51% -0.13%
5 yrs: 15.54% 13-Feb 2020 15.18% 15.27% -0.09%
10 yrs: 16.29% 17 Mar 2027 14.72% 14.82% -0.10%
20 yrs: 16.25% 18-Apr 2037 14.51% 14.80% -0.29%
Source: FMDQ DQL for 08 February 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.22% 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
28-Feb-19 20 9.80% 9.85%
21-Mar-19 41 10.60% 10.72%
01-Aug-19 174 11.70% 12.39%
07-Nov-19 272 14.35% 16.07%

 

Select Macro-economic Indices
Inflation % (December 2018) 11.44 (-25.57% ytd)
PMI (January 2019) 61.10
MPR (%) 14 (-5%/+2% around mid-point)
CRR (%) 22.5
Brent Crude Price US$ pbbl 61.81 (+0.29% d/d)
External Reserve (US$’billion) 43.17 (+0.11% ytd)
GDP % (Q3 2018) +1.81% (Q2 2018: +1.50% y/y)
NSE All Share Index (ASI) 31,529.92 (+0.31% d/d; +0.32% ytd)
Market Capitalisation (₦’Trillion) 11.76

 

Financial Markets Update – 08 February 2019

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