Financial Markets Today

Financial Markets Today

Global equities market opened on a positive note today, after last week’s volatile session, as U.S. and Chinese officials are set to commence another round of trade negotiations this week. The European Stoxx 600, London’s FTSE, German DAX, French CAC, Chinese SHANGHAI, and U.S. NASDAQ indices all gained ca +0.88%, +0.82%, +0.99%, +1.07%, +1.36% and +0.07% day-on-day. Yields of government treasuries in developed economies also rose on investors’ optimism of positive impact of on-going negotiations, with U.S. 10yr bond, German 10yr bond and UK 10yr bond rising to ca +2.657%, +0.119% and +1.18% respectively.

We do not expect a significant positive impact of current negotiations on prices of risk assets in developed economies, with no immediate closure to the U.S./China trade tensions expected before the deadline date of 31 March 2019. We also expect this to further increase volatility in global financial markets in the near term.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Liquidity in the banking system was to open on a negative today. The Central Bank of Nigeria (CBN) conducted an Open Market Operation (OMO) auction to further tighten system liquidity

Treasury Bills
A relatively quiet trading day in the treasury bills secondary market, with sell-offs seen particularly on short-dated maturities. The 28 February 2019 maturity traded the most to close at 9.79%, with average rate gaining ca +5ps day-on-day. Please find below a summary of the results of today’s Open Market Operations (OMO) auction:

Tenor 94-Days 178-Days 360-Days
Maturity Date: 16-May-19 08-Aug-19 06-Feb-20
Amount Offered: ₦ 5.00billion ₦ 10.00billion ₦ 10.00 billion
Subscription: ₦ 2.41billion ₦ 1.08 billion ₦ 34.87 billion
Amount Allotted: ₦ 2.41 billion ₦ 1.08 billion ₦ 34.87 billion
Range of bids: 11.9000% – 11.9000% 13.5000% – 15.0000% 15.0000% – 15.0000%
Stop Rates 11.9000% 13.5000% 15.0000%


Bank Placements

Open Buy Back (OBB) and Overnight (O/N) rates rose to 43.33% and 47.50% from 18.67% and 19.42%. 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 8.00% for 30 – 60 days tenor on ₦10mln – ₦100mln.

Bonds
A relatively quiet trading day in the bonds secondary market today, with activities majorly at the mid-end of the curve. The February 2028 maturity traded the most to close at 14.78% with average yields dropping ca -5bps day-on-day.

Equities
The Nigerian equities market opened the first trading day of the week on a positive note, appreciating for a 7th consecutive trading day, as the Nigerian Stock Exchange All Share Index (NSE ASI) gained ca +0.80% day-on-day to close at 31,781.87pts, with market’s year-to-date returns at +1.12%. This was on the back of gains in highly capitalized as Guaranty Trust Bank Plc (+0.52%), Zenith Bank Plc (+2.25%) and Stanbic IBTC Holding Plc (+2.13%).

The NSE Oil & Gas, Industrial, Consumer Goods and Banking indices all gained ca +58bps, +31bps, +42bps and +190bps respectively day-onday. United Bank for Africa Plc led both the volume and value charts with 101.62m traded at ₦1.15bn.

The Naira remained stable against the dollar at the interbank market window today, at ₦306.70/$1. In the parallel market, it also remained stable against the Dollar, Pound Sterling and Euro at ₦361/$1, ₦473/₤1 and ₦411/€1 respectively. The Naira appreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦361.38/$1 from ₦361.54/$1

Crude oil prices declined today, on rising investors’ concerns over renewed U.S./China trade talks after an initial round of talks failed to yield significant positive results. Brent crude oil price lost ca +0.40% at $61.85pb, while WTI crude was down ca -0.47% at $52.47pb, as at report time. Spot gold was down ca -0.50% day-on-day at $1,311.80 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
LASACO 0.33 0.03 +10.00%
CADBURY 11.00 1.00 +10.00%
OANDO 5.50 0.50 +10.00%
TRANSCORP 1.43 0.13 +9.77%
MCNICHOLS 0.45 0.04 +9.76%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
CILEASING 8.14 -0.90 -9.96%
MEDVIEWAIR 1.70 -0.15 -8.11%
TOTAL 205.00 -15.90 -7.20%
UNIONDAC 0.27 -0.02 -6.90%
JAIZBANK 0.50 -0.03 -5.66%
Benchmark T-Bills Discount Rates
11-Feb-19 08-Feb-19 Change in Rates
80Days 11.10% 11.10% 0.00%
171Days 13.31% 13.08% 0.23%
304Days 14.88% 14.95% -0.07%
Source: FMDQ DQL for 11 February 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
11-Feb-19 08-Jan-19 Change in Yield
3 yrs: 16.00% 29-Jun 2019 13.59% 13.38% 0.21%
5 yrs: 15.54% 13-Feb 2020 15.19% 15.18% 0.01%
10 yrs: 16.29% 17 Mar 2027 14.65% 14.72% -0.07%
20 yrs: 16.25% 18-Apr 2037 14.49% 15.51% -0.02%
Source: FMDQ DQL for 11 February 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.22% 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
28-Feb-19 17 9.55% 9.59%
21-Mar-19 38 10.30% 10.41%
01-Aug-19 171 12.20% 12.94%
07-Nov-19 269 14.35% 16.05%

 

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 61.85 (-0.40% d/d)
External Reserve (US$’billion) 43.17 (+0.11% ytd)
GDP % (Q3 2018) +1.81% (Q2 2018: +1.50% y/y)
NSE All Share Index (ASI) 31,781.87 (+0.80% d/d; +1.12% ytd)
Market Capitalisation (₦’Trillion) 11.85

Financial Markets Update – 11 February 2019

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