Financial Markets Today

Financial Markets Today

Global financial markets appreciated today, on rising optimism of positive outcome of continued U.S./China trade negotiations, with the commencement of a 3rd meeting between delegates of both countries in 2019 today. The U.S. Dow Jones Industrial Average (DJIA), S & P 500, NASDAQ, German DAX, Chinese SHANGHAI, and Japanese NIKKEI all gained ca +0.12%, +0.22%, +0.28%, +0.09%, +0.05% and +0.10% respectively, while price of gold rose to its highest in 11months at $1,342.90 on continued optimism of the U.S. Federal Reserve Bank (FED) maintaining current dovish monetary stance for a longer period in 2019, and expectation of further weakening in the U.S. dollar vs other global currencies.

With rising expectation of an extension to the U.S./China trade negotiations deadline date and continued U.S. FED dovish stance, we expect further rise in investors’ optimism of global risk assets, particularly as the U.S. dollar weakens further after dropping from a 2-month high.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Banking system liquidity was expected to open on a negative note today. There was no Open Market Operation (OMO) auction conducted by the Central Bank of Nigeria (CBN) today.

Treasury Bills
A very active and bullish trading day in the treasury bills secondary market today, with demand seen across the curve, particularly on short-dated maturities. The 21 March maturity traded the most to close at 10.12% from 11.49%, with average rate dropping ca -29bps day-on-day.

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates dropped to 15.00% and 15.83% from 23.33% and 26.08%. Average fixed deposit rates amongst banks monitored showed:
– tier-1 rated banks at 3.50% for 30 – 60 days tenor on ₦10mln – ₦100mln.
– tier-2 rated banks at 7.50% for 30 – 60 days tenor on ₦10mln – ₦100mln.

Bonds
A relatively quiet trading day in the bonds secondary market today. Average yield remained stable day-on-day, with the March 2036 maturity trading the most to close at 14.48%.

Equities
The Nigerian equities market gained today, as the Nigerian Stock Exchange All Share Index (NSE ASI) gained ca +0.67% day-on-day to close at 32,406.17pts, with market’s year-to-date returns at +3.10%. This was largely on the back of price appreciation in Guaranty Trust Bank Plc (+3.29%) and Zenith Bank Plc (+5.63%).

The NSE Oil & Gas, Consumer Goods and Banking indices gained ca +74bps, +26bps and +297bps respectively, while the NSE Industrial index declined ca -21bps. Transnational Corporation of Nigeria Plc led the volume chart with 120.22m units while Dangote Cement Plc led the value chart with ₦951.61mn worth of trade.

The Naira remained stable against the dollar at the interbank market window today, at ₦306.80/$1. In the parallel market, it remained stable against the Dollar and Euro at ₦360/$2 and ₦411/€1 respectively, while it depreciated against the Pound Sterling at ₦469/₤1 from ₦470/₤1. The Naira depreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦361.68/$1 from ₦361.66/$1.

Crude oil prices traded mixed today, on rising concerns of slow progress of on-going U.S./China trade negotiations vs increasing impact of output cut by the Organisation of Petroleum Exporting Countries. Brent crude oil price dropped ca -0.29% at $66.31pb, while WTI crude gained ca % at $56.07pb, as at report time. Spot gold rose ca +1.49% day-on-day at $1,341.90 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
JAPAULOIL 0.23 0.02 +9.52%
SOVRENINS 0.23 0.02 +9.52%
ABCTRANS 0.48 0.04 +9.09%
CUSTODIAN 65.55 0.50 +8.26%
ACADEMY 0.40 0.03 +8.11%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
FIRSTALUM 0.27 -0.03 -10.00%
TRANSCORP 1.39 -0.15 -9.74%
WEMABANK 0.84 -0.09 -9.68%
UNITYBNK 1.03 -0.11 -9.65%
UNIONDAC 0.27 -0.02 -6.90%
Benchmark T-Bills Discount Rates
19-Feb-19 18-Feb-19 Change in Rates
78Days 12.44% 12.62% -0.09%
162Days 12.93% 12.50% 0.00%
309Days 14.79% 14.88% 0.00%
Source: FMDQ DQL for 19 February 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
19-Feb-19 18-Feb-19 Change in Yield
3 yrs: 16.00% 29-Jun 2019 13.08% 12.97% 0.11%
5 yrs: 15.54% 13-Feb 2020 16.60% 16.61% -0.01%
10 yrs: 16.29% 17 Mar 2027 14.75% 14.77% -0.02%
20 yrs: 16.25% 18-Apr 2037 14.42% 14.42% 0.00%
Source: FMDQ DQL for 19 February 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.28% 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
21-Mar-19 30 9.95% 10.03%
09-May-19 79 11.95% 12.27%
01-Aug-19 163 12.45% 13.18%
07-Nov-19 261 14.25% 15.87%

 

Select Macro-economic Indices
Inflation % (December 2018) 11.44 (-25.57% ytd)
PMI (January 2019) 58.50
MPR (%) 14 (-5%/+2% around mid-point)
CRR (%) 22.5
Brent Crude Price US$ pbbl 63.31 (-0.31% d/d)
External Reserve (US$’billion) 42.69 (-0.88% ytd)
GDP % (Q4 2018) +2.38% (Q3 2018: +1.81% y/y)
NSE All Share Index (ASI) 32,406.17 (+0.67% d/d; +3.10% ytd)
Market Capitalisation (₦’Trillion) 12.08

Financial Markets Update – 19 February 2019

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