Financial Markets Today

Financial Markets Today

Trade tensions between the world’s largest economies – U.S. and China escalated further today, with the Chinese government announcing retaliatory measures should the U.S. implement earlier announced plans to increase tariffs on ca $200 billion worth of imports from China to 25% from 10%, effective Friday 10 May 2019. This comes of the back of Reuters report indicating the Chinese government had backtracked on almost all aspects of a draft trade agreement with the U.S. as both countries are set to hold another trade negotiation meeting later this week.

We expect current escalating tensions between U.S. and China to further raise global growth uncertainties for 2019, increase fears of a rise in global risk-off sentiments and raise demand for government treasuries of Developed Economies (DMs) in the near term.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Banking system liquidity was expected to open positive today. There was no 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 witnessed sell offs at the short-end of the curve, with very little activities at the mid-to-long end of the curve. Average rate trended upwards gaining ca +3bps day-on-day, with the 20 June 2019 paper being the most active as it closed at 10.17% from 10.03%.

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates traded lower day-on-day at 6.00% and 6.64% from 10.07% and 10.86%. 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 relatively quiet today, with some activity seen on select maturities. Average yields shed ca -4bps day-on-day, with the July 2021 paper closing at 14.73% from 14.91% yesterday.

Eurobonds

A really bearish day in the nations Eurobonds market today, with sell offs seen across the curve. Average yields gained ca +11bps day-on-day with the February 2038 maturity closing at 7.92% from 7.82%.

Equities

The Nigerian equities market closed negative today, with the Nigerian Stock Exchange All Share Index (NSE ASI) shedding ca -0.45% day-on-day to close at 28,966.41pts, and market’s year-to-date returns at -7.84%. This was mainly due to losses in Guaranty Trust Bank Plc (-2.12%) and Dangote Cement Plc (-1.10%).

The NSE Banking, Industrial and Oil & Gas indices shed ca -77bps, -16bps and -2bps respectively, while the NSE Consumer Goods index gained ca +12bps. United Bank for Africa (UBA) Plc led the volume chart with 59.70m and Zenith Bank Plc led the value charts with ₦661.70mn.

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 and the Euro at ₦470/₤1 and ₦402/€1 respectively in the parallel market. The FMDQ Nigerian Autonomous Foreign Exchange (NAFEX) Fixing rate appreciated at ₦360.62/$1 from ₦360.65/$1.

Oil prices trended below the $70 mark earlier today, on the back of the on-going U.S./China trade negotiations. However, prices recovered after data from the Energy Information Administration (EIA) showed that U.S. crude stockpile fell more than expected. Brent crude oil price gained ca +0.72% day-on-day at $70.32pb, while WTI gained ca +1.04% day-on-day at $62.04pb, as at report time. Spot gold lost ca -0.3423% to close at $1,281.10 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
BETAGLAS 68.95 6.25 +9.97%
LIVESTOCK 0.63 0.04 +6.78%
ETERNA 4.10 0.20 +5.13%
DANGFLOUR 16.80 0.80 +5.00%
NIGERINS 0.21 0.01 +5.00%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
GOLDINSURE 0.27 -0.03 -10.00%
CHAMS 0.48 -0.05 -9.43%
JAPAULOIL 0.38 -0.03 -9.09%
SOVRENINS 0.23 -0.02 -8.00%
AGLEVENT 0.26 -0.02 -7.14%
Benchmark T-Bills Discount Rates
08-May-19 07-May-19 Change in Rates
85 Days 10.45% 10.45% 0.00%
176 Days 12.69% 12.56% 0.13%
344 Days. 12.70% 12.63% 0.07%
Source: FMDQ DQL for 08 May 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
08-May-19 07-May-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 14.73% 14.91% -0.18%
5 yrs: 15.54% 27-Apr 2023 14.47% 14.47% 0.00%
10 yrs: 13.98% 17 Mar 2028 14.57% 14.59% -0.02%
20 yrs: 16.25% 18-Apr 2037  . 14.55% 14.59% -0.04%
Source: FMDQ DQL for 08 May 2019
Benchmark FGN EuroBond Yields
08-May-19 07-May-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 5.11% 4.98% 0.13%
5 yrs: NGERIA 6 3/8 07/12/23 5.67% 5.57% 0.10%
10 yrs: NGERIA 6 1/2 11/28/27 6.86% 6.74% 0.12%
20 yrs: NGERIA 7.696 02/23/38 7.92% 7.82% 0.10%
30 yrs: NGERIA 9.248 01/21/49 8.52% 8.42% 0.10%
Source: FMDQ DQL for 08 May 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.19% 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 70.32 (+0.72% d/d)
External Reserve (US$’billion) 44.837 (+2.26% ytd)
GDP % (Q4 2018) +2.38% (Q3 2018: +1.81% y/y)
NSE All Share Index (ASI) 28,966.41 (-0.45% d/d; -7.84% ytd)
Market Capitalisation (₦’Trillion) 10.89

Financial Markets Update – 08 May 2019

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