Financial Markets Today

Financial Markets Today

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) today, concluded its second 2-day policy meeting, adjusting its Monetary Policy Rate (MPR), its first since July 2016. The MPC agreed to reduce the MPR by 50bps to 13.50% from previous 14% while retaining the Cash Reserve Ratio (CRR) and Liquidity Ratio at 22.50% and 30% respectively, and maintained an asymmetric corridor of +200/- 500bps around the MPR. The change in direction by the CBN comes after the recent reversal in monetary policy stance by the U.S. Federal Reserve Bank and the European Central Bank (ECB) from previous monetary normalisation to a deepened dovish monetary policy stance, with a possibility for rate cuts on recessionary fears as treasury yields inversed late last week. It also comes on the back of growing expectation of a slowdown in global economic growth in 2019, with most Apex banks looking to adopt accommodative monetary policies to boost economic growth for the rest of 2019.

 

With rising expectation for further challenges to global economic growth in the near term on the back of economic slowdown in the world’s largest economies – U.S., China and the Eurozone, rise in recessionary fears and possible re-introduction of Quantitative Easing (QE) by Central Banks of the world’s largest economies, we expect the CBN to keep a keen watch on rate levels and the FX reserves, with possible further reduction in the MPR in Q2 2019.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Liquidity in the banking system opened positive today, at ca ₦85.10bn from previous day’s opening of ₦49.11bn. There was no Open Market Operation (OMO) auction today by the Central Bank of Nigeria (CBN).

Treasury Bills

A quiet trading day in the treasury bills secondary market today, with most activities seen at the mid-to-long end of the curve. Average rates lost ca -3bps day-on-day, with the 03 October 2019 maturity trading the most to close at 13.34%.

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates dropped day-on-day to 16.43% and 17.29% from 22.43% and 24.43%, respectively. 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 8.00% for 30 – 60 days tenor on ₦10mln – ₦100mln.

Bonds
A very quiet trading day in the domestic bonds secondary market today, with only a few trades seen at the mid-end of the curve. Average yield remained flat day-on-day, with the March 2027 and February 2028 maturities trading the most to close at 14.32% and 14.31%, respectively.

Eurobonds

Renewed demand for the nation’s Foreign debt drove yield levels lower today in the Eurobonds market, with average yield dropping ca -4bps day-on-day, particularly the January 2049 maturity which lost ca -6bps day-on-day.

Equities
The Nigerian equities market depreciated marginally today, with the Nigerian Stock Exchange All Share Index (NSE ASI) losing ca -0.01% day on day to close at 31,038.85pts, and market’s year-to-date returns at -1.25%. This was largely on the back of loses in Guaranty Trust Bank Plc (-0.27%) and Nestle Nigeria Plc (-0.01%).

The NSE Banking and Consumer Goods indices both lost -38bps and -54bps respectively, while the NSE Oil & Gas and Industrial indices both gained ca +49bps and +35bps respectively. First Bank of Nigeria Plc led the volume chart with 29.66m units while Dangote Cement Plc led the value chart with ₦379.32mn worth of trades.

The NSE Banking and Consumer Goods indices both lost -38bps and -54bps respectively, while the NSE Oil & Gas and Industrial indices both gained ca +49bps and +35bps respectively. First Bank of Nigeria Plc led the volume chart with 29.66m units while Dangote Cement Plc led the value chart with ₦379.32mn worth of trades.

Brent crude oil prices gained further today, on the back of current output-cut by the Organisation of Petroleum Exporting Countries (OPEC) and expectation of lower U.S. oil inventories. Brent crude oil price gained ca +0.73% at $67.70pb, while WTI gained ca +1.63% at $59.78pb, as at report time. Spot gold lost ca -0.58% to $1,314.90 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
CADBURY 10.85 0.95 +9.60%
CHIPLC 0.29 0.02 +7.41%
NEM 2.35 0.14 +6.33%
LIVESTOCK 0.63 0.03 +5.00%
UNIONDAC 0.30 0.01 +3.45%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
WEMABANK 0.75 -0.05 -6.25%
PRESCO 64.50 -3.50 -9.76%
UPL 1.90 -0.10 -5.00%
WAPIC 0.40 -0.02 -4.76%
TRANSCORP 1.21 -0.05 -3.97%
Benchmark T-Bills Discount Rates
26-Mar-19 25-Mar-19 Change in Rates
72Days                                      . 12.03% 12.14% -0.11%
163Days 13.25% 13.25% 0.00%
338Days. 12.89% 12.92% -0.03%
Source: FMDQ DQL for 26 March 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
26-Mar-19 25-Mar-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 14.67% 14.67% 0.00%
5 yrs: 15.54% 27-Apr 2023 14.46% 14.46% 0.00%
10 yrs: 16.29% 17 Mar 2027 14.32% 14.29% 0.03%
20 yrs: 16.25% 18-Apr 2037  . 14.13% 14.13% 0.00%
Source: FMDQ DQL for 26 March 2019
Benchmark FGN EuroBond Yields
26-Mar-19 25-Mar-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.89% 4.91% -0.02%
5 yrs: NGERIA 6 3/8 07/12/23 5.42% 5.42% 0.00%
10 yrs: NGERIA 6 1/2 11/28/27 6.65% 6.71% -0.06%
20 yrs: NGERIA 7.696 02/23/38 7.78% 7.82% -0.04%
30 yrs: NGERIA 9.248 01/21/49 8.26% 8.32% -0.06%
Source: FMDQ DQL for 26 March 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.65% 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-19 128 11.55% 12.04%
17-Oct-19 205 12.80% 13.79%
07-Nov-19 226 12.75% 13.84%
16-Jan-20 396 12.65% 14.10%

 

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 67.70 (+0.73% d/d)
External Reserve (US$’billion) 43.50 (+0.89% ytd)
GDP % (Q4 2018) +2.38% (Q3 2018: +1.81% y/y)
NSE All Share Index (ASI) 31,038.85 (-0.01% d/d; -1.25% ytd)
Market Capitalisation (₦’Trillion) 11.67

Financial Markets Update – 26 March 2019

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