Financial Markets Today

Financial Markets Today

Trade tensions between the U.S and China further reached a new high today, with the implementation of a rise in U.S. tariffs on ca $200 billion worth of imports from China to 25% from previous 10%, with promised retaliatory measures from China. This comes as no deal was reached at the end of another negotiation meeting between the world’s largest economies today, further raising investors’ fears of continued escalation of tensions and global growth slowdown in 2019.

We expect continued uncertainties of global growth and rising global trade tensions between the world’s largest economies to increase volatility of assets and commodity prices in the global financial markets through H1, with increased negative impact on risk-off sentiments in H2 2019.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Banking system liquidity opened positive today at ca ₦609bn up from ca ₦345bn yesterday. There was no Open Market Operation (OMO) auction by the Central Bank of Nigeria (CBN) today, however, Banks had to make provisions for Retail FX Intervention in USD & Yuan as well as AMCON Sinking Fund Contributions.

Treasury Bills
A very active day in the treasury bills secondary market today, with demand across the curve; fueled by improved interbank liquidity and a lack of Open Market Operation (OMO) auction by the Central Bank (CBN). Average rates shed ca -13bps day-on-day, with the 29 August 2019 maturity being the most active, closing at 11.40% from 11.93%.

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates traded higher day-on-day at 9.14% and 10.00% from 4.71% and 5.71%. 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
An aggressively bullish day in the bonds secondary market today, with investors’ interest witnessed across the curve. Average yields shed ca -11bps day-on-day, with the April 2037 maturity closing at 14.19% from 14.45% yesterday.

Eurobonds

Investors took interest in the nations Eurobonds market today, with cherry picking of elevated yields across the curve. Average yields shed ca -4bps day-on-day with the January 2021 maturity closing at 4.92% from 5.17%.

Equities

The Nigerian equities market ended the week on a negative note today, declining for a 5th consecutive trading day, with the Nigerian Stock Exchange All Share Index (NSE ASI) shedding ca -0.17% day-on-day to close at 28,847.81pts, and market’s year-to-date returns at -8.22%. This was mainly due to losses in Seplat Petroleum Development Plc (-9.98%) and Guaranty Trust Bank Plc (-0.93%).

The NSE Banking and Oil & Gas indices shed ca -26bps and -451bps respectively, while the NSE Consumer goods index gained +13bps and the Industrial remained flat. Sovereign Insurance Plc led the volume chart with 44.54m units and Zenith Bank Plc led the value chart with ₦332.83mn worth of trades.

The Naira traded flat against the dollar in both the interbank and parallel markets today, at ₦306.95/$1 and ₦360/$1 respectively. It remained flat against the Euro and the Pound sterling at ₦402/€1 and ₦472/₤1 respectively, in the parallel market. The FMDQ Nigerian Autonomous Foreign Exchange (NAFEX) Fixing rate appreciated to ₦360.55/$1 from ₦360.76/$1.

Oil prices appreciated today, as weak global supplies overshadowed on-going U.S./China trade tensions on implementation of a 25% tariff on ca $200 billion worth of imports from China. Brent crude oil price gained ca +0.68% day-on-day at $70.87pb, while WTI gained ca +0.36% day-on-day at $61.92pb, as at report time. Spot gold gained ca +0.2334% to close at $1,288.10 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
SOVRENINS 0.25 0.02 +8.70%
NEM 2.50 0.18 +7.76%
PRESTIGE 0.50 0.03 +6.38%
STANBIC 46.00 2.30 +5.26%
ROYALEX 0.24 0.01 +4.35%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
ABCTRANS 0.27 -0.03 -10.00%
SEPLAT 522.00 -57.90 -9.98%
AFRIPRUD 3.54 -0.39 -9.92%
NEIMETH 0.50 -0.05 -9.09%
CHAMS 0.40 -0.04 -9.09%
Benchmark T-Bills Discount Rates
10-May-19 09-May-19 Change in Rates
90 Days 11.29% 11.65% -0.36%
181 Days 12.46% 12.62% -0.16%
342 Days. 12.50% 12.70% -0.20%
Source: FMDQ DQL for 10 May 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
10-May-19 09-May-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 14.44% 14.44% 0.00%
5 yrs: 15.54% 27-Apr 2023 14.07% 14.40% -0.33%
10 yrs: 13.98% 17 Mar 2028 14.22% 14.41% -0.19%
20 yrs: 16.25% 18-Apr 2037  . 14.19% 14.45% -0.26%
Source: FMDQ DQL for 10 May 2019
Benchmark FGN EuroBond Yields
10-May-19 09-May-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.92% 5.17% -0.25%
5 yrs: NGERIA 6 3/8 07/12/23 5.65% 5.72% -0.07%
10 yrs: NGERIA 6 1/2 11/28/27 6.93% 6.95% -0.02%
20 yrs: NGERIA 7.696 02/23/38 7.98% 7.99% -0.01%
30 yrs: NGERIA 9.248 01/21/49 8.59% 8.60% -0.01%
Source: FMDQ DQL for 10 May 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.21% 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 83 9.75% 9.97%
17-Oct-19 160 11.85% 12.50%
07-Nov-19 181 12.00% 12.76%
16-Jan-20 251 12.00% 13.08%
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 70.87 (+0.68% d/d)
External Reserve (US$’billion) 44.843 (+2.25% ytd)
GDP % (Q4 2018) +2.38% (Q3 2018: +1.81% y/y)
NSE All Share Index (ASI) 28,847.81 (-0.17% d/d; -8.22% ytd)
Market Capitalisation (₦’Trillion) 10.84

Financial Markets Update – 10 MAY 2019

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