Financial Markets Today

Financial Markets Today

Global equities market rallied today, coming off last few days of losses, on positive investors’ sentiments after the release of economic data by the U.S. Commerce Department which showed its housing statistics rose 5.7% month-on-month in April vs 1.65% in March, while its weekly jobless claims recorded a lower 212,000 claims vs market analysts’ expectation of 220,000 claims. These followed announcement by the U.S. government of a delay in the implementation of its planed increment to 25% import tax on automobiles from China, with the U.S. Dow Jones Industrial Average (DJIA), S & P 500, NASDAQ, German DAX, London’s FTSE, and Chinese SHANGHAI indices all gained ca +0.96%, +1.20%, +1.26%, +1.74%, +0.78% and +0.58% respectively while yield levels on U.S. treasuries rose as investors sold positions held with renewed preference for equities.

We expect global financial markets to remain volatile in the near term, as investors evaluate potential impact of the release of new positive economic data from the world’s largest economy – U.S. vs fears of global economic slowdown on escalating U.S./China trade tensions.

Mobile Telephone Network (MTN) Nigeria Plc which makes ca 28% of the largest mobile network service provider in Africa, largest mobile network in Nigeria with ca 58.1 million subscribers or ca 50% of total subscriber base in Nigeria and the highest gross revenue earner for a corporate in the nation’s history at ca ₦1.03 trillion for 2018 year end, was listed by introduction on the Nigerian Stock Exchange (NSE) today. This makes it the 2nd largest capitalized stock on the NSE with ca ₦2.015 trillion or 17% of total market capitalization and comes as the first phase of its listing plans, with only ca 21% free float of its shares and a 2nd phase planned for a sale of some part of its remaining 79% holding to the Nigerian Public to create a total free float of 35% of the company’s shares.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Banking system liquidity opened positive today, rising to ca ₦299.4bn, up from ca ₦182.2bn yesterday, after inflow of ca ₦117bn from Open Market Operation (OMO) maturities. The Central Bank of Nigeria (CBN) did not conduct an OMO auction today.

Treasury Bills
The treasury bills secondary market continued to trade on a bullish note today, as investors reacted to ca -28bps drop in rates at yesterday’s Primary Market Auction (PMA). Demand was persistent at the mid-to-long end of the curve, in the absence of an Open Market Operation (OMO) auction by the Central Bank of Nigeria (CBN). Average rates shed ca -16bps day-on-day with 26 September 2019 maturity trading the most to close at 11.72% from 11.94%.

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates traded lower day-on-day at 5.86% and 6.57% from 9.86% and 10.57%. 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 traded bullish today, with demand on select maturities as investors reacted to lower rates in the treasury bills market. Average yields shed ca -7bps day-on-day, with the July 2021 maturity closing at 14.37% from 14.65%.

Eurobonds

Demand continued in the nation’s Eurobonds market today, with demand seen across the curve. Average yields shed ca -7bps day-on-day with the January 2049 maturity closing at 8.57% from 8.67%.

Equities

The Nigerian equities market halted its downward trend today, ending an 8-day run of losses as the Nigerian Stock Exchange All Share Index (NSE ASI) gained ca +0.54% day-on-day to close at 28,438.19pts, while the market’s year-to-date returns closed at -9.52%. This was mainly due to the listing of MTN Nigeria Plc which gained ca +10% today.

The NSE Banking, Consumer goods, Industrial and Oil & Gas indices all lost ca -171bps, -83bps, -97bps and -56bps respectively. Transnational Corporation Of Nigeria Plc led the volume chart with 105.49m units while MTN Nigeria Plc led the value chart with ₦548.60m worth of trades.

The Naira remained flat against the dollar in both the interbank and Parallel markets at ₦306.95/$1 and ₦361/$1 respectively. It also remained stable against the Pound sterling at ₦472/₤1, while depreciating against the Euro at ₦404/€1, in the parallel market. The FMDQ Nigerian Autonomous Foreign Exchange (NAFEX) Fixing rate appreciated to ₦360.30/$1 from ₦360.34/$1.

Oil prices gained for a 3rd consecutive trading day today, on rising fears of a disruption of supply from the Middle East after announced attacks on Saudi Arabia’s oil pumping stations early this week. Brent crude oil price rose by ca +1.59% day-on-day at $72.91pb, while WTI gained ca +1.61% day-on-day at $63.02pb, as at report time. Spot gold was down ca -0.74% to close at $1,286.40 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
MTNN 99 9.00 +10.00%
NPFMCRFBK 1.47 0.13 +9.70%
ABCTRANS 0.29 0.02 +7.41%
WAPIC 0.38 0.02 +5.56%
UNIONDAC 0.24 0.01 +4.35%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
UNITYBNK 0.65 -0.07 -9.27%
CUTIX 1.65 -0.15 -8.33%
SOVRENINS 0.23 -0.02 -8.00%
WEMABANK 0.62 -0.04 -6.06%
AFRIPRUD 3.60 -0.22 -5.76%
Benchmark T-Bills Discount Rates
16-May-19 15-May-19 Change in Rates
84 Days 10.61% 10.61% 0.00%
175 Days 11.75% 12.23% -0.48%
336 Days. 12.35% 12.45% -0.10%
Source: FMDQ DQL for 16 May 2019
Benchmark FGN Bond Yields
16-May-19 15-May-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 14.37% 14.65% -0.28%
5 yrs: 15.54% 27-Apr 2023 14.07% 14.07% 0.00%
10 yrs: 13.98% 17 Mar 2028 14.32% 14.36% -0.04%
20 yrs: 16.25% 18-Apr 2037  . 14.29% 14.29% 0.00%
Source: FMDQ DQL for 16 May 2019
Benchmark FGN EuroBond Yields
16-May-19 15-May-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.85% 4.92% -0.07%
5 yrs: NGERIA 6 3/8 07/12/23 5.60% 5.67% -0.07%
10 yrs: NGERIA 6 1/2 11/28/27 6.97% 7.05% -0.08%
20 yrs: NGERIA 7.696 02/23/38 7.98% 8.05% -0.07%
30 yrs: NGERIA 9.248 01/21/49 8.57% 8.64% -0.07%
Source: FMDQ DQL for 16 May 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.31% 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 77 9.75% 9.95%
17-Oct-19 154 11.40% 11.98%
07-Nov-19 175 11.80% 12.51%
16-Jan-20 245 11.80% 12.82%
Select Macro-economic Indices
Inflation % (March 2019) 11.37 (+1.07% ytd)
PMI (April 2019) 57.70
MPR (%) 13.5 (-5%/+2% around mid-point)
CRR (%) 22.5
Brent Crude Price US$ pbbl 72.91 (+1.59% d/d)
External Reserve (US$’billion) 44.982 (+2.23% ytd)
GDP % (Q4 2018) +2.38% (Q3 2018: +1.81% y/y)
NSE All Share Index (ASI) 28,438.19 (+0.54% d/d; -9.52% ytd)
Market Capitalisation (₦’Trillion) 12.53

Financial Markets Update – 16 MAY 2019

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