Financial Markets Today

Financial Markets Today

Global benchmark equity indices declined today, on increasing fears of continued escalation of a resurgent U.S./China trade tension, with the U.S. Dow Jones Industrial Average (DJIA), S & P 500, NASDAQ, UK FTSE and French CAC indices all shedding ca -0.38%, -0.58%, -1.04%, -0.07% and -0.18% respectively. This comes on the back of reports of a possible collapse in trade talks between U.S. and China, with both countries considering further tariffs on their respective imports, after last week’s implementation of tariffs on a combined ca $260 billion worth of imports.

We expect global equities market to remain volatile in the near term and through the end of H1, on increasing fears of a global economic slowdown, particularly with current uncertainties of trade negotiations between the world’s largest economies – U.S. and China.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Banking system liquidity opened positive today at ca ₦297.74bn marginally down from ca ₦299.4bn yesterday. The Central Bank of Nigeria (CBN) did not conduct an Open Market Operation (OMO) auction today.

Treasury Bills
Fueled by positive interbank liquidity and a lack of OMO auction by the CBN, the treasury bills secondary market ended the week on a bullish note today, as market witnessed aggressive demand at the mid-to-long end of the curve. Average rates shed ca -20bps day-on-day, with the 26 September 2019 maturity closing at 11.35% from 11.72%.

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates traded lower day-on-day at 4.57% and 5.29% from 5.86% and 6.57%. 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 ended the week on a bullish note today, with demand seen on short-dated maturities. Average yields shed ca -9bps day-on-day, with the July 2021 maturity closing at 14.00% from 14.37%.

Eurobonds

A calm end to the week in the nation’s Eurobonds market today, with only a few transactions done. Average yields trended upwards, gaining ca +3bps day-on-day with the February 2038 maturity closing at 8.01% from 7.98%.

Equities

The Nigerian equities market closed the week on a positive note today, with the listing of MTN Nigeria Plc returning positive sentiments in the equities market. The Nigerian Stock Exchange All Share Index (NSE ASI) gained ca +1.53% day-on-day to close at 28,871.93pts, with market’s year-to-date returns closed at -8.14%. This was mainly due gains in the price of MTN Nigeria Plc shares (+10%).

The NSE Banking, Consumer goods and Oil & Gas indices all lost ca -39bps, -3bps and -41bps respectively, while the Industrial index gained ca +8bps. Transnational Corporation Of Nigeria Plc led the volume chart with 58.59m units while MTN Nigeria Plc led the value chart with ₦5.53bn 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 appreciated against the Pound sterling and the Euro at ₦471/₤1 and ₦404/€1 respectively, in the parallel market. The FMDQ Nigerian Autonomous Foreign Exchange (NAFEX) Fixing rate appreciated to ₦360.23/$1 from ₦360.30/$1.

Oil prices were volatile today, as market continues to grapple with growing tensions between U.S and Iraq, as well as information released yesterday that showed an increase in America’s crude oil stockpile. Brent crude oil price shed ca -0.22% day-on-day at $72.43pb, while WTI gained ca +0.46% day-on-day at $63.16pb, as at report time. Spot gold shed ca -0.80% to close at $1,275.90 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
MTNN 108.90 9.90 +10.00%
CUTIX 1.80 0.15 +9.09%
ROYALEX 0.24 0.02 +9.09%
CHAMS 0.37 0.03 +8.82%
TRANSCORP 1.24 0.10 +8.77%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
FO 28.35 -3.15 -10.00%
CHAMPION 1.17 -0.12 -9.30%
FCMB 1.55 -0.15 -8.82%
COURTVILLE 0.23 -0.02 -8.00%
JAPAULOIL 0.26 -0.02 -7.14%
Benchmark T-Bills Discount Rates
17-May-19 16-May-19 Change in Rates
83 Days 10.04% 10.61% -0.57%
174 Days 11.37% 11.75% -0.38%
335 Days. 12.15% 12.35% -0.20%
Source: FMDQ DQL for 17 May 2019
Benchmark FGN Bond Yields
17-May-19 16-May-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 14.00% 14.37% -0.37%
5 yrs: 15.54% 27-Apr 2023 14.07% 14.07% 0.00%
10 yrs: 13.98% 17 Mar 2028 14.23% 14.32% -0.09%
20 yrs: 16.25% 18-Apr 2037  . 14.29% 14.29% 0.00%
Source: FMDQ DQL for 17 May 2019
Benchmark FGN EuroBond Yields
17-May-19 16-May-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.92% 4.85% 0.07%
5 yrs: NGERIA 6 3/8 07/12/23 5.64% 5.60% 0.04%
10 yrs: NGERIA 6 1/2 11/28/27 7.01% 6.97% 0.04%
20 yrs: NGERIA 7.696 02/23/38 8.01% 7.98% 0.03%
30 yrs: NGERIA 9.248 01/21/49 8.57% 8.57% 0.00%
Source: FMDQ DQL for 17 May 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.32% 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 76 9.85% 10.06%
17-Oct-19 153 11.40% 11.97%
07-Nov-19 174 11.40% 12.11%
16-Jan-20 244 11.70% 12.69%
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 72.43 (-0.22% d/d)
External Reserve (US$’billion) 45.004 (+2.23% ytd)
GDP % (Q4 2018) +2.38% (Q3 2018: +1.81% y/y)
NSE All Share Index (ASI) 28,871.93 (+1.53% d/d; -8.14% ytd)
Market Capitalisation (₦’Trillion) 12.72

Financial Markets Update – 17 MAY 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.