Financial Markets Today

Financial Markets Today

Global financial markets remained volatile today, with major equity indices in both the U.S. and China losing day-on-day after the release of weaker-than-expected economic data. The U.S. Dow Jones Industrial Average (DJIA), S & P 500, NASDAQ, Japanese NIKKEI and Chinese SHANGHAI indices all declined as the U.S. government reported new homes purchase fell ca 6.9% in January, with China’s industrial output declining to a 17-year low in February, further indicating economic slowdown in the world’s 2 largest economies.

 

We expect continued volatility in global financial markets in the near term, on increasing expectation of a slowdown in global economy growth and rising uncertainties of the U.S./China trade negotiations. We expect this to further limit possibilities of Central Banks of developed economies (DMs) to maintain tightening monetary policy stance began from 2017, with a possible rise in stimulus from governments of DMs and respective Apex banks in Q2 2019.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Liquidity in the banking system opened positive today, at ca ₦249.412bn. There was an OMO auction conducted by the Central Bank of Nigeria (CBN) today.

Treasury Bills
A very bullish trading day in the treasury bills secondary market today, as investors’ expectation of lower stop rates at the Open Market Operations (OMO) drove demand across the curve. Average rates lost ca -8bps day-on-day, with the 30 May 2019 maturity traded the most to close at 11.67%. Please find below a summary of the results of today’s OMO auction:

Tenor 91-Days 175-Days
Maturity Date: 13-Jun-19 05-Sep-19
Amount Offered: ₦ 50.00 billion ₦ 300.00 billion
Subscription: ₦ 62.05 billion ₦ 367.45 billion
Amount Allotted: ₦ 50.75 billion ₦ 349.73 billion
Range of bids: 11.0000% – 11.9000% 12.6900% – 13.2500%
Stop Rates 11.8400% 13.2000%

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates rose day-on-day to 10.67% and 11.58% from 9.42% and 10.00%. 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 trading day in the bonds secondary market today, with most activities at the mid-end of the curve. Average yield lost ca -10bps day-on-day, with the February 2028 maturity trading the most to close at 14.23% from 14.26%.

Eurobonds

Improved demand in the nation’s Eurobond market drove yields lower today, with average yield dropping ca -6bps day-on-day, particularly the February 2038 maturity which lost ca -7bps day-on-day to close at 7.88%.

Equities
TThe Nigerian equities market depreciated today, with the Nigerian Stock Exchange All Share Index (NSE ASI) losing ca -0.48% day-on-day to close at 31,210.79pts, with market’s year-to-date returns at -0.70%. This was majorly on the back of price decline in Dangote Cement Plc (-1.04%), Guaranty Trust Bank Plc (-0.84%), Nestle Nigeria Plc (-0.32%) and Zenith Bank Plc (-0.89%).

The NSE Industrial and Banking indices both lost ca -52bps and -37bps respectively while NSE Oil & Gas was up +13bps, the NSE Consumer Goods remained stable. Zenith Bank Plc led both the volume and value charts with 80.78m units traded at ₦1.8bn.

The Naira remained stable against the dollar at the interbank market window today, at ₦306.95/$1. In the parallel market, it remained stable against the Dollar, Pound Sterling and Euro at ₦360/$1, ₦472/₤1 and ₦406/€1 respectively. The Naira depreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦360.19/$1 from ₦360.05/$1.

Crude oil prices traded mix today, reaching a 4-month high, supported by implementation of output curb agreement by the Organisation of Petroleum Exporting Countries (OPEC) and its partners along with U.S. sanctions on Iran and Venezuela. Brent crude oil price was down ca -0.40% at $67.28pb, while WTI crude gained ca +0.50% at $58.55pb, as at report time. Spot gold lost ca -1.02% day-on-day at $1,295.90 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
MCNICHOLS 0.57 0.05 +9.62%
DANGFLOUR 10.30 0.80 +8.42%
IKEJAHOTEL 2.30 0.17 +7.98%
STERLNBANK 2.50 0.14 +5.93%
NEM 2.50 0.12 +5.04%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
LEARNAFRCA 1.31 -0.14 -9.66%
TRANSCOHOT 5.40 -0.55 -9.24%
LAWUNION 0.51 -0.05 -8.93%
ETERNA 4.40 -0.40 -8.33%
LASACO 0.31 -0.02 -6.06%
Benchmark T-Bills Discount Rates
14-Mar-19 13-Mar-19 Change in Rates
84Days                                      . 12.10% 12.17% -0.07%
175Days 13.02% 13.24% -0.22%
350Days. 12.64% 12.76% -0.12%
Source: FMDQ DQL for 14 March 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
14-Mar-19 13-Mar-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 14.73% 14.83% -0.10%
5 yrs: 15.54% 27-Apr 2023 14.71% 14.36% 0.14%
10 yrs: 16.29% 17 Mar 2027 14.02% 14.37% -0.07%
20 yrs: 16.25% 18-Apr 2037  . 14.25% 14.20% -0.11%
Source: FMDQ DQL for 14 March 2019
Benchmark FGN EuroBond Yields
14-Mar-19 13-Mar-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.81% 4.85% -0.04%
5 yrs: NGERIA 6 3/8 07/12/23 5.59% 5.65% 0.06%
10 yrs: NGERIA 6 1/2 11/28/27 6.85% 6.90% -0.05%
20 yrs: NGERIA 7.696 02/23/38 7.88% 7.95% -0.07%
30 yrs: NGERIA 9.248 01/21/49 8.34% 8.38% -0.04%
Source: FMDQ DQL for 14 March 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.35% 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-19 140 10.20% 11.70%
17-Oct-19 217 12.65% 13.68%
07-Nov-19 238 12.60% 13.73%
16-Jan-20 308 12.30% 13.72%

 

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 67.28 (-0.40% d/d)
External Reserve (US$’billion) 42.87 (-0.57% ytd)
GDP % (Q4 2018) +2.38% (Q3 2018: +1.81% y/y)
NSE All Share Index (ASI) 31,210.79 (-0.48% d/d; -0.70% ytd)
Market Capitalisation (₦’Trillion) 11.64

Financial Markets Update – 14 March 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.
AIICO Capital is regulated by the Securities and Exchange Commission, and is licensed to provide fund and portfolio management services in Nigeria.