Financial Markets Today

Nigeria’s Headline inflation for May 2019 rose for a 2nd consecutive month and to its highest level in 2019, rising to 11.40% year-on-year (y/y), from 11.37% y/y recorded in April 2019, data from the Nigerian Bureau of Statistics showed today. The rise can be attributed to continued rise in food prices in the month of May, with the food sub-index rising to 13.79% vs 13.70% in April 2019, despite continued decline in Core sub-index for a 4th consecutive month to 9.00% from 9.30%.

We expect this to have little impact on current rate levels at the short-end of the yield curve in the fixed income, as we expect current uptick in inflation to be short-lived. We also do not expect the Central Bank (CBN) to make any immediate change to its current rate direction to stimulate economic growth, of the back on the uptick in inflation levels, with global investors focus on the meeting of the Federal Reserve Bank holding 18 – 19 June 2019.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Banking system liquidity was expected to open positive today, however, lower than Friday’s opening, as Banks made provisions for Wholesale FX intervention. 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 on a bullish note today, as interbank liquidity remained positive. There was demand on the short-to-mid dated maturities, as average rates shed ca -3bps day-on-day, with the 29 August 2019 maturity trading the most to close at 10.26% from 10.67%.

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates trended higher day-on-day at 8.86% and 9.43% from 5.29% and 5.71%. 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
The bonds secondary market kicked off the week on a quiet note today, with fewer client orders and protective quotes by traders. Bid/offer spreads were arbitrarily widened across the curve as average yields gained ca +3bps day-on-day, with April 2023 maturity closing at 14.37% from 14.31%.

Eurobond

The nation’s Eurobonds market kicked off the week on a bullish note today, with demand on most maturities across the curve. Average yields shed ca -3bps day-on-day, with the January 2049 maturity closing at 8.68% from 8.70%.

Equities
The Nigerian equities market kicked off the week on a negative note today, with the Nigerian Stock Exchange All Share Index (NSE ASI) shedding ca -0.37% day-on-day to close at 29,936.33pts, and market’s year-to-date returns at -4.75%. This was largely due to marginal gains in Zenith Bank Plc (+1.00%).

The NSE Banking, Consumer goods and Oil & Gas indices gained ca +16bps, +38bps and +30bps respectively, while the Industrial index shed ca -53bps. Wema Bank Plc led both the volume and value charts with ca 2.6bn and ca ₦1.71bn respectively.

The Naira remained flat against the dollar in both the interbank and parallel markets at ₦307/$1 and ₦361/$1 respectively. It also remained stable against the Pound sterling and Euro at ₦462/₤1 and ₦402/€1 respectively, in the parallel market. The FMDQ Nigerian Autonomous Foreign Exchange (NAFEX) Fixing rate appreciated day-on-day at ₦360.32/$1 from ₦360.46/$1.

Crude oil prices dropped today, off the back of weak economic data from China released last Friday, which further amplified current concerns of global economic slowdown. Brent crude oil price dropped ca -1.56% day-on-day at $61.04pb, while WTI gained ca -1.07% day-on-day at $51.95pb, as at report time. Spot gold shed ca -0.0892% at $1,343.40 per ounce.

Top 5 Equitiy Advancers
Name (Symbol)	Closing Price	Gain(N)	% Change
PRESTIGE	0.55	0.05	+10.00%
FO	32.30	2.90	+9.86%
WAPIC	0.45	0.04	+9.76%
COURTVILLE	0.23	0.02	+9.52%
JAPAULOIL	0.25	0.01	+4.17%

Top 5 Equity Decliners
Name (Symbol)	Closing Price	Gain(N)	% Change
ROYALEX	0.22	-0.02	-8.33%
NAHCO	2.80	-0.19	-6.35%
THOMASWY	0.31	-0.02	-6.06%
OANDO	3.70	-0.20	-5.13%
UCAP	2.22	-0.11	-4.72%

Benchmark T-Bills Discount Rates
	17-Jun-19	14-Jun-19	Change in Rates
87 Days .	10.67%	10.67%	0.00%
178 Days-	11.59%	11.52%	0.07%
346 Days.	12.15%	12.31%	0.02%
Source: FMDQ DQL for 17 June 2019

Benchmark FGN Bond Yields
	17-Jun-19	14-Jun-19	Change in Yield
3 yrs: 16.00% 15-Jul-2021	14.87%	14.63%	0.24%
5 yrs: 15.54% 27-Apr 2023	14.37%	14.31%	0.06%
10 yrs: 13.98% 23-Feb 2028	14.62%	14.71%	-0.09%
20 yrs: 16.25% 18-Apr 2037 .	14.77%	14.60%	0.17%
Source: FMDQ DQL for 17 June 2019

Benchmark FGN EuroBond Yields
	17-Jun-19	14-Jun-19	Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21	4.70%	4.73%	-0.03%
5 yrs: NGERIA 6 3/8 07/12/23	5.50%	5.52%	-0.02%
10 yrs: NGERIA 6 1/2 11/28/27	7.22%	7.25%	-0.03%
20 yrs: NGERIA 7.696 02/23/38	8.16%	8.18%	-0.02%
30 yrs: NGERIA 9.248 01/21/49	8.68%	8.70%	-0.02%
Source: FMDQ DQL for 17 June 2019

AIICO Money Market Fund (AMMF)
Net Yield (As at current date)	13.18% 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	45	6.75%	6.81%
17-Oct-19	122	11.25%	11.69%
07-Nov-19	143	11.45%	11.99%
16-Jan-20	213	11.85%	12.73%

Select Macro-economic Indices
Inflation % (May 2019)	11.40 (-0.35% ytd)
PMI (May 2019)	57.80
MPR (%)	13.5 (-5%/+2% around mid-point)
CRR (%)	22.5
Brent Crude Price US$ pbbl	61.04 (-1.56% d/d)
External Reserve (US$’billion)	45.162 (+1.57% ytd)
GDP % (Q1 2019)	+2.01% (Q4 2018: +2.38% y/y)
NSE All Share Index (ASI)	29,936.33 (-0.37% d/d; -4.75% ytd)
Market Capitalisation (₦’Trillion)	13.19