Financial Markets Today

Financial Markets Today

Investors’ optimistic outlook to global economic growth in 2019 faltered today, after the release of retail sales figures for December 2018 by the U.S. Commerce Department, indicating its biggest monthly drop in retail sales since September 2009. Retail sales in the U.S. declined ca – 1.2% month-on-month, further raising investors’ fears of a global economic slowdown in 2019. Yields on government treasuries of developed economies declined today on increased demand for safe-haven assets, with yield on the U.S. 10yr bond, Japan 10yr bond, U.K. 10yr bond and France 10yr bond all dropping to ca +2.655%, -0.014%, +1.145% and +0.528% respectively.

With continued uncertainty of global economic growth in 2019, on possible economic slowdown in the world’s largest economies – U.S. and China, we expect increasing demand for safe-haven assets in Q1 2019, despite current optimistic sentiments of U.S./China trade negotiations.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Liquidity in the banking system opened negative today, at ca -₦151 billion. In line with its tight monetary policy, the Central Bank of Nigeria (CBN) conducted an Open Market Operation (OMO) auction today.

Treasury Bills
The treasury bills secondary market continued on a bearish note today, with Sell-pressure seen particularly at the short-end of the curve. Average rate gained ca +12bps day-on-day, with the 28 February maturity traded the most to close at 11.27% from 10.27%. Please find below a summary of the results of today’s Open Market Operation (OMO) Auction (PMA):

Tenor 91-Days 175-Days 364-Days
Maturity Date: 16-May-19 08-Aug-19 13-Feb-20
Amount Offered: ₦ 50.00 billion ₦ 150.00 billion ₦ 450.00 billion
Subscription: ₦ 40.73 billion ₦ 25.73 billion ₦ 404.90 billion
Amount Allotted: ₦ 40.73 billion ₦ 25.73 billion ₦ 404.90 billion
Range of bids: 11.0000% – 11.9000% 11.9000% – 13.5000% 14.9500% – 15.0000%
Stop Rates 11.9000% 13.5000% 15.0000%

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates dropped to 15.00% and 16.00% from 20.00% and 23.17%. Average fixed deposit rates amongst banks monitored showed:
– tier-1 rated banks at 3.50% for 30 – 60 days tenor on ₦10mln – ₦100mln.
– tier-2 rated banks at 7.50% for 30 – 60 days tenor on ₦10mln – ₦100mln.

Bonds
A relatively active trading day in the bonds secondary market today, with most interest seen on the March 2036 maturity which traded the most to close at 14.56%. Average yield dropped ca -3bps day-on-day.

Equities
The Nigerian equities market recovered yesterday’s today, as the Nigerian Stock Exchange All Share Index (NSE ASI) lost ca +0.12% day-onday to close at 32,453.69pts, with market’s year-to-date returns at +3.26%. This was mainly due to price appreciation in prices of Dangote Cement Plc (+0.53%).

The NSE Oil & Gas and Banking indices lost ca -75bps and -45bps respectively, while the NSE Industrial and Consumer Goods indices gained ca +71bps and +27bps. Diamond Bank Plc led the volume chart with 97m units while Zenith Bank Plc led the value chart with ₦997mn worth of trade.

The Naira remained stable against the dollar at the interbank market window today, at ₦306.75/$1. In the parallel market, it depreciated against the Dollar at ₦361/$2 from ₦361/$1, while it remained stable against both the Pound Sterling and Euro at ₦473/₤1 and ₦411/€1 respectively. The Naira appreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦361.38/$1 from ₦361.58/$1.

Crude oil prices rose for a 4th consecutive day today, with Brent crude oil price reaching its highest in 2019, on continued optimism of a positive outcome of U.S./China trade negotiations. Brent crude oil price gained ca +1.23% at $64.39pb, while WTI crude rose ca +0.91% at $54.39pb, as at report time. Spot gold rose ca +0.02% day-on-day at $1,315.30 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
LIVESTOCK 0.66 0.06 +10.00%
ABCTRANS 0.44 0.04 +10.00%
UNITYBNK 1.14 0.10 +9.62%
UNILEVER 47.00 3.00 +6.82%
WEMABANK 0.95 0.06 +6.74%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
UBN 6.33 -0.55 -8.03%
OANDO 5.50 -0.30 -5.17%
DANGFLOUR 8.35 -0.40 -4.57%
UNIONDAC 0.30 -0.01 -3.23%
ETERNA 4.70 -0.15 -3.09%
Benchmark T-Bills Discount Rates
14-Feb-19 13-Feb-19 Change in Rates
77Days 11.15% 11.30% -0.15%
168Days 12.50% 12.50% 0.00%
301Days 14.89% 14.84% -0.05%
Source: FMDQ DQL for 14 February 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
14-Feb-19 13-Jan-19 Change in Yield
3 yrs: 16.00% 29-Jun 2019 12.96% 12.89% 0.07%
5 yrs: 15.54% 13-Feb 2020 16.68% 16.80% -0.12%
10 yrs: 16.29% 17 Mar 2027 14.76% 14.73% 0.03%
20 yrs: 16.25% 18-Apr 2037 14.48% 14.50% -0.02%
Source: FMDQ DQL for 14 February 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.25% 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
14-Mar-19 28 10.70% 10.79%
09-May-19 84 11.70% 12.02%
01-Aug-19 168 12.20% 12.93%
07-Nov-19 266 14.35% 16.03%

 

Select Macro-economic Indices
Inflation % (December 2018) 11.44 (-25.57% ytd)
PMI (January 2019) 58.50
MPR (%) 14 (-5%/+2% around mid-point)
CRR (%) 22.5
Brent Crude Price US$ pbbl 64.39 (+1.23% d/d)
External Reserve (US$’billion) 42.91 (-0.48% ytd)
GDP % (Q4 2018) +2.38% (Q3 2018: +1.81% y/y)
NSE All Share Index (ASI) 32,453.69 (+0.12% d/d; +3.26% ytd)
Market Capitalisation (₦’Trillion) 12.10

Financial Markets Update – 14 February 2019

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