Financial Markets Today
Global equities kicked off the week on a positive note today, with the Dow Jones Industrial Average (DJIA), S&P 500, NASDAQ, London FTSE and French CAC all gaining ca +0.57%, +0.80%, +1.59%, +0.59% and +0.34% respectively. This comes off renewed positive investors optimism of global economic growth with the announcement by the U.S. government of an indefinite suspension of previously planned tariffs on imports from Mexico, which were initially planned to commence today, 10 June.
We expect the rally in global equities to continue in the near term, with investors optimistic of continued calm to trade tensions and possible U.S./China re-start of trade negotiations at this month’s G-20 meeting on 28 – 29 June.
MONEY MARKETS
CAPITAL MARKETS
FOREIGN EXCHANGE
COMMODITIES
Banking system liquidity opened positive today at ca ₦136.46bn lower than ca ₦584.25bn recorded the previous day. The Central Bank of Nigeria (CBN) did not conduct an Open Market Operation (OMO) auction today.
Treasury Bills
The treasury bills secondary market kicked off the week on a bullish note, buoyed by positive interbank liquidity, market witnessed demand on the short-to-mid end of the curve. Average rates shed ca -18bps day-on-day, with the 29 August 2019 maturity closing at 11.38% from 11.74%.
Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates traded higher day-on-day at 12.29% and 12.71% from 10.86% and 11.43%, as Banks made provisions for Wholesale FX Interventions. 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
A relatively quiet start to the week in the bonds secondary market today, with few transactions at the short and long end of the curve. Average yields marginally gained ca +2bps day-on-day, with February 2028 maturity trading flat at 14.60%.
Eurobond
The nation’s Eurobonds market kicked off the week on a bullish note today, on continued interest from investors as President Donald Trump announced the suspension of tariffs on Mexican imports. Average yields shed ca -9bps day-on-day with the February 2038 maturity closing at 7.99% from 8.10%.
Equities
The Nigerian equities market commenced the week on a negative note today, with the Nigerian Stock Exchange All Share Index (NSE ASI) marginally shedding ca -0.36% day-on-day to close at 30,322.19pts, and market’s year-to-date returns at -3.53%. This was largely due to losses in MTN Nigeria Plc (-0.37%) and Zenith Bank Plc (-0.49%).
The NSE Banking, Consumer goods, Industrial and Oil & Gas indices all lost ca -10bps, -62bps, -235bps and -21bps respectively. Zenith Bank Plc led the volume and value charts with ca 70.25m units and ca ₦1.42bn respectively.
The Naira remained flat against the dollar in both the interbank and parallel markets at ₦306.95/$1 and ₦361/$1 respectively. It also remained stable against the Euro at ₦402/€1 and the Pound sterling at ₦465/₤1, in the parallel market. The FMDQ Nigerian Autonomous Foreign Exchange (NAFEX) Fixing rate depreciated day-on-day at ₦360.44/$1 from ₦360.41/$1.
Crude oil prices trended lower today, on the back of reports that Saudi Arabia and Russia were yet to agree to extend production cut beyond June 2019. Brent crude oil price lost ca -0.93% day-on-day at $62.70pb, while WTI gained ca -0.31% day-on-day at $53.83pb, as at report time. Spot gold shed ca -1.11% at $1,331.10 per ounce.
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| Benchmark T-Bills Discount Rates | ||||
| 10-Jun-19 | 07-Jun-19 | Change in Rates | ||
| 90 Days . | 11.43% | 12.17% | -0.74% | |
| 181 Days- | 12.42% | 12.41% | 0.01% | |
| 356 Days. | 12.38% | 12.39% | -0.01% | |
| Source: FMDQ DQL for 10 June 2019 | ||||
| Benchmark FGN Bond Yields | ||||
| 10-Jun-19 | 07-Jun-19 | Change in Yield | ||
| 3 yrs: 16.00% 15-Jul-2021 | 14.62% | 14.64% | -0.02% | |
| 5 yrs: 15.54% 27-Apr 2023 | 14.75% | 14.54% | 0.21% | |
| 10 yrs: 13.98% 23 Feb 2027 | 14.60% | 14.60% | 0.00% | |
| 20 yrs: 16.25% 18-Apr 2037 . | 14.50% | 14.54% | -0.04% | |
| Source: FMDQ DQL for 10 June 2019 | ||||
| Benchmark FGN EuroBond Yields | ||||
| 10-Jun-19 | 07-Jun-19 | Change in Yield | ||
| 3 yrs: NGERIA 6 3/4 01/28/21 | 4.63% | 4.70% | -0.07% | |
| 5 yrs: NGERIA 6 3/8 07/12/23 | 5.44% | 5.51% | -0.07% | |
| 10 yrs: NGERIA 6 1/2 11/28/27 | 7.09% | 7.19% | -0.10% | |
| 20 yrs: NGERIA 7.696 02/23/38 | 7.99% | 8.10% | -0.11% | |
| 30 yrs: NGERIA 9.248 01/21/49 | 8.53% | 8.64% | -0.11% | |
| Source: FMDQ DQL for 10 April 2019 | ||||
| AIICO Money Market Fund (AMMF) | |
| Net Yield (As at current date) | 13.14% 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 | 55 | 10.15% | 10.31% |
| 17-Oct-19 | 132 | 12.15% | 12.71% |
| 07-Nov-19 | 153 | 11.80% | 12.41% |
| 16-Jan-20 | 223 | 12.15% | 13.12% |
| Select Macro-economic Indices | |
| Inflation % (April 2019) | 11.37 (+1.07% ytd) |
| PMI (May 2019) | 57.80 |
| MPR (%) | 13.5 (-5%/+2% around mid-point) |
| CRR (%) | 22.5 |
| Brent Crude Price US$ pbbl | 62.70 (-0.93% d/d) |
| External Reserve (US$’billion) | 45.160 (+1.73% ytd) |
| GDP % (Q4 2018) | +2.01% (Q4 2018: +2.38% y/y) |
| NSE All Share Index (ASI) | 30,322.19 (-0.36% d/d; -3.53% ytd) |
| Market Capitalisation (₦’Trillion) | 13.35 |
Financial Markets Update – 07 June 2019
Important Disclaimers
This document has been issued and approved by AIICO Capital and is based on information from various sources that we believe are reliable. However, no representation is made that it is accurate or complete. While reasonable care has been taken in preparing this document, no responsibility or liability is accepted for errors or fact or for any opinion expressed herein. This document is for information purposes only. It does not constitute any offer or solicitation to any person to enter into any trading transaction.
Investments discussed in this report may not be suitable for all investors. This report is provided solely for the information of AIICO Capital clients who are then expected to make their own investment decisions. AIICO Capital conducts designated investment business with market counter parties and customers and this document is directed only to such persons. AIICO Capital accepts no liability whatsoever for any direct or consequential loss arising from any use of this report or its contents. This report is for private circulation only and may not be reproduced, distributed or published by any recipient for any purpose without prior express consent of AIICO Capital. Users of this report should bear in mind that investments can fluctuate in price and value. Past performance is not necessarily a guide to future performance.
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