Financial Markets Today

Financial Markets Today

Yields in Nigeria’s domestic debt market declined sharply today, on improved investors’ sentiments after the announcement of the nomination of current Central Bank (CBN) Governor, Mr. Godwin Emefiele for a 2nd 5-year term, by the Nigerian President, Muhammadu Buhari. This comes after months of speculation of a replacement at the helm of the Apex bank and fears of subsequent changes to monetary policies. Prices rallied in the domestic bonds market, with yields at the long end of the yield curve dropping ca 10bps – 20bps day-on-day, on investors expectation of a continuance of CBN’s current currency support and stability of the Naira.

We expect current positive sentiments and expectation of continued monetary policy stability, particularly FX stability and CBN’s currency support, to further boost investors’ interest in the nation’s domestic fixed income market in the near term.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Banking system liquidity was expected to open positive today. There was Open Market Operation (OMO) maturity today, as well as an auction by the Central Bank of Nigeria (CBN) today.

Treasury Bills
The treasury bills secondary market was relatively more active today, witnessing some sell offs on short-dated maturities and mixed sentiments at the mid-to-long end of the curve. Average rates trended upwards gaining ca +7bps day-on-day, with the 06 June 2019 maturity being the most active, closing at 10.80% from 9.91%. There was Open Market Operation (OMO) auction today by the Central Bank (CBN), please find below a summary of the result:

Tenor 91-Days 175-Days 336-Days
Maturity Date: 08-Aug-19 31-Oct-19 09-Apr-20
Amount Offered: ₦20.000 billion ₦20.000 billion ₦100.000 billion
Subscription ₦40.080 billion ₦20.650 billion ₦228.700 billion
Amount Allotted: ₦14.980 billion ₦17.340 billion ₦112.020 billion
Range of bids 11.6500% – 11.7800% 12.7000% – 12.8100% 12.7800% – 12.8400%
Stop Rate 11.7200% 12.7700% 12.8200%

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates traded lower day-on-day at 4.71% and 5.71% from 6.00% and 6.64%. 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 closed on a bullish note today, with demand seen across the curve, particularly after the announcement of the nomination of the current Central Bank (CBN) governor for a 2nd 5-year term. Average yields shed ca -10bps day-on-day, with the Feb 2028 maturity closing at 14.42% from 14.58% yesterday.

Eurobonds

A bearish day in the nations Eurobonds market today, with sell offs on many of the papers. Average yields gained ca +8bps day-on-day with the November 2047 maturity closing at 8.21% from 8.11%.

Equities

The Nigerian equities market continued on a negative note today, declining for a 4th consecutive trading day, with the Nigerian Stock Exchange All Share Index (NSE ASI) shedding ca -0.24% day-on-day to close at 28,896.25pts, and market’s year-to-date returns at -8.06%. This was mainly due to losses in Zenith Bank Plc (-2.20%) and Nigerian Breweries Plc (-0.31%).

The NSE Banking and Consumer goods indices shed ca -55bps and -3bps respectively, while the NSE Industrial and Oil & Gas indices remained flat. Access Bank Plc led the volume chart with 40.70m units and Zenith Bank Plc led the value chart with ₦576.45mn 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 at ₦402/€1 but depreciated against the Pound sterling at ₦472/₤1 in the parallel market. The FMDQ Nigerian Autonomous Foreign Exchange (NAFEX) Fixing rate depreciated to ₦360.76/$1 from ₦360.62/$1.

Oil prices came under pressure today as trade tension between the world’s largest economies remained elevated, with only hours before the implementation of an increment to U.S. tariffs on ca $200 billion worth of imports from China. Brent crude oil price shed ca -0.21% day-on-day at $70.22pb, while WTI lost ca -0.89% day-on-day at $61.59pb, as at report time. Spot gold gained ca +0.2809% to close at $1,285.00 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
VERITASKAP 0.22 0.02 +10.00%
MANSARD 1.95 0.10 +5.41%
FCMB 1.89 0.09 +5.00%
REGALINS 0.26 0.01 +4.00%
AFRIPRUD 3.93 0.12 +3.15%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
JAPAULOIL 0.27 -0.03 -10.00%
CAVERTON 2.44 -0.27 -9.96%
NEIMETH 0.55 -0.06 -9.84%
CHAMS 0.44 -0.03 -8.33%
AGLEVENT 0.24 -0.02 -7.69%
Benchmark T-Bills Discount Rates
09-May-19 08-May-19 Change in Rates
84 Days 10.45% 10.45% 0.00%
175 Days 12.68% 12.69% -0.01%
343 Days. 12.70% 12.70% 0.00%
Source: FMDQ DQL for 09 May 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
09-May-19 08-May-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 14.44% 14.73% -0.29%
5 yrs: 15.54% 27-Apr 2023 14.40% 14.47% -0.07%
10 yrs: 13.98% 17 Mar 2028 14.41% 14.57% -0.16%
20 yrs: 16.25% 18-Apr 2037  . 14.45% 14.55% -0.10%
Source: FMDQ DQL for 09 May 2019
Benchmark FGN EuroBond Yields
09-May-19 08-May-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 5.17% 5.11% 0.06%
5 yrs: NGERIA 6 3/8 07/12/23 5.72% 5.67% 0.05%
10 yrs: NGERIA 6 1/2 11/28/27 6.95% 6.86% 0.09%
20 yrs: NGERIA 7.696 02/23/38 7.99% 7.92% 0.07%
30 yrs: NGERIA 9.248 01/21/49 8.60% 8.52% 0.08%
Source: FMDQ DQL for 09 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 85 9.95% 10.19%
17-Oct-19 162 12.25% 12.95%
07-Nov-19 183 12.35% 13.17%
16-Jan-20 253 12.35% 13.51%
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 70.22 (-0.21% 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) 28,896.25 (-0.24% d/d; -8.06% ytd)
Market Capitalisation (₦’Trillion) 10.86

Financial Markets Update – 09 May 2019

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