Financial Markets Today

Financial Markets Today

Yields of U.S. government treasuries rose today, with the 10yr U.S. bonds treasury rising to ca +2.605% after declining to its lowest in 2019 last week Friday. This comes on the back of rising investors’ uncertainties of U.S./China trade negotiations as both governments agreed to an extension of the initial 14 March deadline and as investors’ look forward to the commencement of the 2nd Federal Open Market Committee (FOMC) meeting of the U.S. Federal Reserve Bank on 19 March.

 

We expect the U.S. Federal Reserve Bank to maintain its benchmark interest rate at current level of 2.25% – 2.50% in the near term, on continued expectation for a slowdown in global economic growth in 2019, continued uncertainties of U.S./China trade negotiations and with inflation rate expected to remain within the Fed’s expected range.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Banking system liquidity was expected to open positive today. There was no OMO auction conducted by the Central Bank of Nigeria (CBN) today.

Treasury Bills
A relatively quiet trading day in the treasury bills secondary market today, with a few activities seen particularly at the long-end of the curve. Average rates gained ca +2bps day-on-day, with the 27 February 2020 maturity trading the most to close at 12.68%.

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates dropped day-on-day to 10.58% and 11.58% from 11.17% and 11.67%. 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 quiet start to the week in the domestic bonds secondary market today, with only a few trade seen across the curve. Average yield gained ca +3bps day-on-day, with the March 2036 maturity trading the most to close at 14.28% from 14.24%..

Eurobonds

Yield in the nation’s Eurobonds market dropped further today on continued investors’ demand, particularly at the long-end of the curve. Average yield lost ca -8bps day-on-day, particularly the February 2032 maturity which lost ca -11bps day-on-day.

Equities
The Nigerian equities market declined today, majorly on the back of price depreciation in Dangote Cement Plc (-0.05%) and Zenith Bank Plc (-0.45%). The Nigerian Stock Exchange All Share Index (NSE ASI) lost ca -0.06% day-on-day to close at 31,125.39pts, with market’s year-to-date returns at -0.97%.

The NSE Banking index lost ca -23bps while the NSE Consumer Goods and Industrial indices gained ca +11bps and +3bps respectively. The NSE Oil & Gas index remained stable day-on-day. Access Bank Plc led the volume chart with 56.02m units while Zenith Bank Plc led the value chart with trades worth ₦603.65mn.

The Naira remained stable against the dollar at the interbank market window today, at ₦306.95/$1. In the parallel market, it depreciated against the Dollar and Pound Sterling at ₦360/$1 and ₦475/₤1 from ₦359/$1 and ₦471/₤1 respectively, while it appreciated against the Euro at ₦405/€1 from ₦406/€1. The Naira depreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦360.25/$1 from ₦360.15/$1.

Crude oil prices appreciated today, further supported by output cut by the Organisation of Petroleum Exporting Countries (OPEC) and its partners, as the Organisation agreed to cancel its earlier scheduled meeting for April and leaving considerations on its current supply cuts in place till its next meeting in June. Brent crude oil price gained ca +0.43% at $67.45pb, while WTI crude was up ca +0.84% at $59.01pb, as at report time. Spot gold gained ca +0.02% day-on-day at $1,303.10 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
DANGFLOUR 10.95 0.75 +7.35%
UNIONDAC 0.30 0.02 +7.14%
MCNICHOLS 0.60 0.03 +5.26%
CAVERTON 2.25 0.08 +3.69%
UCAP 2.85 0.05 +1.79%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
IKEJAHOTEL 1.87 -0.20 -9.66%
CUTIX 2.05 -0.20 -8.89%
SOVRENINS 0.23 -0.02 -8.00%
WEMABANK 0.71 -0.06 -7.79%
LINKASSURE 0.55 -0.04 -6.78%
Benchmark T-Bills Discount Rates
18-Mar-19 15-Mar-19 Change in Rates
80Days                                      . 12.18% 11.90% -0.28%
173Days 13.00% 13.00% -0.00%
346Days. 12.68% 12.61% -0.07%
Source: FMDQ DQL for 18 March 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
18-Mar-19 15-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 14.48% 14.50% -0.02%
10 yrs: 16.29% 17 Mar 2027 14.47% 14.44% 0.03%
20 yrs: 16.25% 18-Apr 2037  . 14.13% 14.09% 0.04%
Source: FMDQ DQL for 18 March 2019
Benchmark FGN EuroBond Yields
18-Mar-19 15-Mar-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.83% 4.83% 0.00%
5 yrs: NGERIA 6 3/8 07/12/23 5.45% 5.53% -0.08%
10 yrs: NGERIA 6 1/2 11/28/27 6.69% 6.78% -0.09%
20 yrs: NGERIA 7.696 02/23/38 7.74% 7.83% -0.09%
30 yrs: NGERIA 9.248 01/21/49 8.21% 8.29% -0.08%
Source: FMDQ DQL for 18 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-19 146 11.35% 11.85%
17-Oct-19 213 12.60% 13.60%
07-Nov-19 234 12.55% 13.65%
16-Jan-20 304 12.25% 13.64%

 

Select Macro-economic Indices
Inflation % (February 2019) 11.31 (-1.14% ytd)
PMI (February 2019) 57.10
MPR (%) 14 (-5%/+2% around mid-point)
CRR (%) 22.5
Brent Crude Price US$ pbbl 67.45 (-0.43% 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) 31,125.39 (-0.06% d/d; -0.97% ytd)
Market Capitalisation (₦’Trillion) 11.61

Financial Markets Update – 18 March 2019

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