Financial Markets Today

Financial Markets Today

Global equities market declined further today, on confirmation by the U.S. government of a plan to increase previous tariffs on ca $200 billion worth of imports from China to 25% from 10%, taking effect from Friday 10 May 2019. This further escalated trade tensions between the world’s largest economies today, despite expectation of a another trade negotiation meeting later this week involving top government officials of both nations. Most global equity benchmark indices lost day-on-day while yields on treasuries of developed economies dropped lower on increased interest by investors seeking safe-haven risk assets on rising trade war fears.

With rising fears of a renewed escalation of trade wars between U.S. and China and continued uncertainties of global economic growth, we expect increased volatility in global financial markets in the near term, particularly if no deal is reached at the end of its meeting on Friday.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Banking system liquidity opened positive today at ca ₦479bn, down from ca ₦634bn yesterday. There was an Open Market Operation (OMO) auction by the Central Bank of Nigeria (CBN) today.

Treasury Bills
The treasury bills secondary market traded bearish today, as market reacted to another Central Bank (CBN) Open Market Operation (OMO) auction in two days. Average yields trended upwards gaining ca +3bps day-on-day, with the 02 April 2020 paper being the most active closing at 12.78% from 12.74%. Please find below a summary of the result of today’s Open Market Operations (OMO) auction:

Tenor 93-Days 205-Days 331-Days
Maturity Date: 08-Aug-19 28-Nov-19 02-Apr-20
Amount Offered: ₦30.000 billion ₦20.000 billion ₦80.000 billion
Subscription ₦38.250 billion ₦24.340 billion ₦204.550 billion
Amount Allotted: ₦31.000 billion ₦8.200 billion ₦117.340 billion
Range of bids 11.6900% – 11.8000% 12.7900% – 12.8800% 12.8400% – 12.94100%
Stop Rate 11.7800% 12.8500% 12.8900%

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates traded lower day-on-day at 10.07% and 10.86% from 11.36% and 12.07%. 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 was largely quiet today, with very few trading activities on select papers particularly the April 2023. Average yields marginally inched up gaining ca +2bps day-on-day, with the April 2049 paper closing at 14.74% from 14.66% yesterday.

Eurobonds

A really quiet day in the nations Eurobonds market today, with only a handful of trades across the curve. Average yields gained ca +4bps day-on-day with the February 2028 maturity closing at 7.77% from 7.82%.

Equities

The Nigerian equities market declined further today, with the Nigerian Stock Exchange All Share Index (NSE ASI) shedding ca -0.34% day-on-day to close at 29,096.41pts, and market’s year-to-date returns at -7.43%. This was mainly due to losses in Zenith Bank Plc (-1.67%) and Nigerian Breweries Plc (-0.08%)

The NSE Banking, Consumer Goods and Oil & Gas indices shed ca -54bps, -54bps and -66bps respectively, while the NSE Industrial index gained ca +34bps. Courteville Business Solutions Plc led the volume chart with 106.57m units while Guaranty Trust Bank Plc led the value chart with ₦703.70mn.

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 Pound sterling at ₦470/₤1 and depreciated against the Euro at ₦402/€1 in the parallel market. The FMDQ Nigerian Autonomous Foreign Exchange (NAFEX) Fixing rate remained flat at ₦360.65/$1.

Oil prices fell today, as renewed doubts over U.S./China trade talks sparked new concerns over global economic growth. Brent crude oil price declined ca -1.09% day-on-day at $70.46pb, while WTI lost ca -0.93% day-on-day at $61.67pb, as at report time. Spot gold gained ca +0.1246% to close at $1,285.40 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
BETAGLAS 62.70 5.70 +10.00%
COURTVILLE 0.26 0.02 +8.33%
CHAMS 0.53 0.04 +8.16%
CHIPLC 0.29 0.02 +7.41%
REGALINS 0.26 0.01 +4.00%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
DANGFLOUR 16.00 -1.75 -9.86%
IKEJAHOTEL 1.45 -0.15 -9.38%
CADBURY 10.70 -1.10 -9.32%
GOLDINSURE 0.30 -0.03 -9.09%
VERITASKAP 0.20 -0.02 -9.09%
Benchmark T-Bills Discount Rates
07-May-19 06-May-19 Change in Rates
86 Days 10.45% 10.25% 0.20%
177 Days 12.56% 12.50% 0.06%
345 Days. 12.63% 12.63% 0.00%
Source: FMDQ DQL for 07 May 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
07-May-19 06-May-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 14.91% 14.80% 0.11%
5 yrs: 15.54% 27-Apr 2023 14.47% 14.73% -0.26%
10 yrs: 13.98% 17 Mar 2028 14.59% 14.50% 0.09%
20 yrs: 16.25% 18-Apr 2037  . 14.59% 14.63% -0.04%
Source: FMDQ DQL for 07 May 2019
Benchmark FGN EuroBond Yields
07-May-19 06-May-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.98% 4.97% 0.01%
5 yrs: NGERIA 6 3/8 07/12/23 5.57% 5.55% 0.02%
10 yrs: NGERIA 6 1/2 11/28/27 6.74% 6.70% 0.04%
20 yrs: NGERIA 7.696 02/23/38 7.82% 7.77% 0.05%
30 yrs: NGERIA 9.248 01/21/49 8.42% 8.36% 0.06%
Source: FMDQ DQL for 07 May 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.17% 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 86 10.10% 10.35%
17-Oct-19 163 12.40% 13.13%
07-Nov-19 184 12.45% 13.28%
16-Jan-20 254 12.50% 13.69%
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 70.46 (-1.09% d/d)
External Reserve (US$’billion) 44.813 (+2.27% ytd)
GDP % (Q4 2018) +2.38% (Q3 2018: +1.81% y/y)
NSE All Share Index (ASI) 29,096.41 (-0.34% d/d; -7.34% ytd)
Market Capitalisation (₦’Trillion) 10.94

Financial Markets Update – 07 May 2019

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