Financial Markets Today

Financial Markets Today

Nigeria’s Headline inflation for February 2019 declined to 11.31% year-on-year (y/y), from 11.37% y/y recorded in January 2019, data from the Nigerian Bureau of Statistics showed today. The drop can be attributed to a drop in both the sub-indices that make up the headline inflation with the food sub-index dropping to 13.47% vs 13.51% in January 2019, while the Core sub-index declined marginally to 9.80% from 9.90%. This comes despite expectation of increased electioneering spending in February with the Central Bank of Nigeria (CBN) increasing its tightening stance of banking system liquidity since December 2018, taking out ca ₦2.952 trillion from the banking system in February and ca ₦8.644 trillion in the last 3 months, in its attempt to limit impact of electioneering spending on inflation.

 

We expect inflationary pressure to remain subdued through the first half of 2019 with no significant change expected in the drivers of both the Food and Non-Food sub-indices of the Headline inflation index.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Liquidity in the banking system opened positive today, at ca ₦425bn. There was no OMO auction conducted by the Central Bank of Nigeria (CBN) today.

Treasury Bills
A relatively active trading day in the treasury bills secondary market today, with light demand seen particularly at the long-end of the curve. Average rates lost ca -2bps day-on-day, with the 09 January 2020 maturity trading the most to close at 12.83%.

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates rose day-on-day to 11.17% and 11.67% from 10.67% 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
A very quiet trading day in the bonds secondary market today, with a few trade seen across the curve. Average yield lost ca -10bps day-on-day, with the February 2028 maturity trading the most to close at 14.24%.

Eurobonds

Continued demand for the nation’s foreign denominated debt assets further drove yields lower in the Eurobonds market today, with average yield dropping ca -5bps day-on-day, particularly the February 2038 maturity which lost ca -7bps day-on-day for a 2nd consecutive trading day to close at 7.83%.

Equities
The Nigerian equities market depreciated today, with the Nigerian Stock Exchange All Share Index (NSE ASI) losing ca -0.22% day-on-day to close at 31,142.72pts, with market’s year-to-date returns at -0.92%. This was majorly on the back of price decline in Zenith Bank Plc (-0.90%).

The NSE Consumer Goods and Banking indices both lost ca -3bps and -80bps respectively while NSE Oil & Gas and Industrial indices were up +32bps and +5bps respectively. First Bank of Nigeria Holding Plc led the volume chart with 39.96m units while Zenith Bank Plc led the value chart with trades worth ₦877.86mn.

The Naira remained stable against the dollar at the interbank market window today, at ₦306.95/$1. In the parallel market, it appreciated against the Dollar and Pound Sterling at ₦359/$1 and ₦471/₤1 from ₦360/$1 and ₦472/₤1 respectively, while it remained stable against the Euro at ₦406/€1. The Naira appreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦360.15/$1 from ₦360.19/$1.

Crude oil prices declined today, from year-to-date highs, on continued concerns of rising output from U.S. Shale production which rose to its historical high in February, despite output curbs by the Organisation of Petroleum Exporting Countries (OPEC) and its partners. Brent crude oil price declined ca -0.34% at $67.16pb, while WTI crude lost ca -0.38% at $58.39pb, as at report time. Spot gold gained ca +0.56% day-on-day at $1,302.30 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
ROYALEX 0.35 0.03 +9.37%
JAIZBANK 0.54 0.03 +5.88%
NEIMETH 0.67 0.02 +3.08%
UBN 7.00 0.15 +2.19%
OANDO 5.85 0.10 +1.74%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
IKEJAHOTEL 2.07 -0.23 -10.00%
STERLNBANK 2.31 -0.19 -7.60%
UCAP 2.80 -0.20 -6.67%
AFRIPRUD 3.80 -0.25 -6.17%
FCMB 1.85 -0.11 -5.61%
Benchmark T-Bills Discount Rates
15-Mar-19 14-Mar-19 Change in Rates
83Days                                      . 11.90% 12.10% -0.20%
174Days 13.00% 13.02% -0.02%
349Days. 12.61% 12.64% -0.03%
Source: FMDQ DQL for 15 March 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
15-Mar-19 14-Mar-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 14.73% 14.73% 0.00%
5 yrs: 15.54% 27-Apr 2023 14.50% 14.50% 0.00%
10 yrs: 16.29% 17 Mar 2027 14.44% 14.30% 0.14%
20 yrs: 16.25% 18-Apr 2037  . 14.09% 14.09% 0.00%
Source: FMDQ DQL for 15 March 2019
Benchmark FGN EuroBond Yields
15-Mar-19 14-Mar-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.83% 4.81% 0.02%
5 yrs: NGERIA 6 3/8 07/12/23 5.53% 5.59% -0.06%
10 yrs: NGERIA 6 1/2 11/28/27 6.78% 6.85% -0.07%
20 yrs: NGERIA 7.696 02/23/38 7.83% 7.88% -0.05%
30 yrs: NGERIA 9.248 01/21/49 8.29% 8.34% -0.05%
Source: FMDQ DQL for 15 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-19 139 11.50% 12.03%
17-Oct-19 216 12.80% 13.85%
07-Nov-19 237 12.65% 13.78%
16-Jan-20 307 12.45% 13.91%

 

Select Macro-economic Indices
Inflation % (February 2019) 11.31 (-1.41% ytd)
PMI (February 2019) 57.10
MPR (%) 14 (-5%/+2% around mid-point)
CRR (%) 22.5
Brent Crude Price US$ pbbl 67.16 (-0.34% 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) 31,142.72 (-0.22% d/d; -0.92% ytd)
Market Capitalisation (₦’Trillion) 11.61

Financial Markets Update – 15 March 2019

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