Financial Markets Today

Financial Markets Today

U.S. headline inflation figure declined to its lowest since September 2016, dropping to 1.5% year-on-year, below market analyst’ expectation of 1.6% year-on-year and below the U.S. Federal Reserve’s target of 2%, with yields on U.S. treasuries dropping day-on-day as the 10yr U.S. treasury bond dropping to ca +2.609%. This comes after the U.S. recorded its lowest non-farm jobs growth in 2 years in February 2019, with the interest rates expected to remain at current low levels in developed economies in 2019.

With continued expectation for a further drop in inflation levels and increasing expectation for a slowdown U.S. economic growth in 2019, we expect the U.S. Federal Reserve Bank to maintain current dovish monetary stance for most part of 2019.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Liquidity in the banking system opened on a positive note today, at ca ₦179.90bn. There was no OMO auction conducted by the Central Bank of Nigeria (CBN) today.

Treasury Bills
A relatively quiet trading day in the treasury bills secondary market today, with average rates rising ca +3bps day-on-day. The 02 May 2019 maturity traded the most to close at 10.30%. There will be a Primary Market Auction (PMA) tomorrow with ₦89.5bn on offer. Please find below our expectation for stop rates:

S/N AUCTION DATE TENOR OFFER AMOUNT
(NGN)
LAST STOP RATE EXPECTED STOP RATE RANGE
1 13-Mar-19 91-Day 5,000,000,000.00 10.90% 10.70% – 10.95%
2 13-Mar-19 182-Day 14,000,000,000.00 13.01% 12.35% – 12.60%
3 13-Mar-19 364-Day 70,500,000,000.00 14.37% 12.80% – 13.05%

 

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates dropped day-on-day to 9.67% and 10.33% from 10.83% and 11.58%. 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
Continued quiet trading in the bonds secondary market today. Average yield lost ca -5bps day-on-day, with the April 2023 maturity trading the most to close at 14.55% from 14.58%.

Eurobonds

Yields declined further in the nation’s Eurobond market, on continued interest from global investors, particularly on the January 2049 maturity which lost ca -10bps day-on-day. Average yield lost ca -9bps day-on-day.

Equities
The Nigerian equities market declined for a 5th consecutive trading day, largely on the back of losses in Dangote Cement Plc (-0.51%), Guaranty Trust Bank Plc (-4.83%) and Zenith Bank Plc (-0.88%). The Nigerian Stock Exchange All Share Index (NSE ASI) lost ca -1.02% day-on-day to close at 31,313.36pts, with market’s year-to-date returns turning negative at -0.37%.

The NSE Oil & Gas, Consumer Goods and Banking indices all lost ca -37bps, -130bps and -226bps respectively while NSE Industrial was up +24bps. First Bank of Nigeria Holding Plc led the volume chart with 60.138m units while Zenith Bank Plc led the value chart with trades worth ₦1.05bn.

The Naira depreciated against the dollar at the interbank market window today, at ₦306.95/$1 from ₦306.90/$1. In the parallel market, it remained stable against the Dollar and Pound Sterling at ₦360/$1 and ₦472/₤1 respectively, while it appreciated against the Euro at ₦406/€1 from ₦407/€1. The Naira depreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦360.27/$1 from ₦360.25/$1.

Crude oil prices rose further today, supported by plan’s by Saudi Arabia to implement increased voluntary supply cuts in April. Brent crude oil price gained ca +0.38% at $66.83pb, while WTI crude gained ca +0.67% at $57.17pb, as at report time. Spot gold gained ca +0.52% day-on-day at $1,297.80 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
LAWUNION 0.56 0.04 +7.69%
UAC-PROP 1.95 0.13 +7.14%
UCAP 3.28 0.13 +4.13%
WAPCO 13.00 0.50 +4.00%
AIICO 0.73 0.02 +2.82%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
INTBREW 24.05 -2.65 -9.93%
AGLEVENT 0.31 -0.03 -8.82%
JAIZBANK 0.53 -0.05 -8.62%
LINKASSURE 0.58 -0.05 -7.94%
UNITYBNK 0.83 -0.07 -7.78%
Benchmark T-Bills Discount Rates
12-Mar-19 11-Mar-19 Change in Rates
79 Days                                    . 11.01% 11.01% 0.00%
142 Days 12.17% 12.17% 0.00%
331 Days 13.02% 13.27% -0.25%
Source: FMDQ DQL for 12 March 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
12-Mar-19 11-Mar-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 14.83% 14.83% 0.00%
5 yrs: 15.54% 27-Apr 2023 14.55% 14.58% -0.03%
10 yrs: 16.29% 17 Mar 2027 14.42% 14.42% 0.00%
20 yrs: 16.25% 18-Apr 2037    . 14.33% 14.33% 0.00%
Source: FMDQ DQL for 12 March 2019
Benchmark FGN Eurobond Yields
12-Mar-19 11-Mar-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.81% 4.87% -0.06%
5 yrs: NGERIA 6 3/8 07/12/23 5.60% 5.69% -0.09%
10 yrs: NGERIA 6 1/2 11/28/27 6.85% 6.94% -0.09%
20 yrs: NGERIA 7.696 02/23/38 7.90% 7.99% -0.09%
30 yrs: NGERIA 9.248 01/21/49 8.34% 8.44% -0.10%
Source: FMDQ DQL for 12 March 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.28% 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-19 142 11.60% 12.15%
17-Oct-19 219 12.85% 13.92%
07-Nov-19 240 12.80% 13.98%
16-Jan-20 310 12.70% 14.24%

 

Select Macro-economic Indices
Inflation % (January 2019) 11.37 (-0.61% ytd)
PMI (February 2019) 57.10
MPR (%) 14 (-5%/+2% around mid-point)
CRR (%) 22.5
Brent Crude Price US$ pbbl 66.83 (+0.38% d/d)
External Reserve (US$’billion) 42.32 (-1.86% ytd)
GDP % (Q4 2018) +2.38% (Q3 2018: +1.81% y/y)
NSE All Share Index (ASI) 31,313.36 (-1.02% d/d; -0.37% ytd)
Market Capitalisation (₦’Trillion) 11.68

Financial Markets Update – 12 March 2019

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