Financial Markets Today

Financial Markets Today

The Federal Open Market Committee (FOMC) of the U.S. Federal Reserve Bank (Fed) concluded its 4th policy meeting of 2019 today, holding its key benchmark interest rate unchanged at 2.25% – 2.50%, and lowering its forecast for headline inflation in the U.S. to 1.5% from previous forecast of 1.8% and below the Fed’s target of 2%. Yields on global treasuries in Developed Economies (DMs) declined for a 2nd consecutive trading day, with the 10yr U.S. treasury dropping to its lowest since November 2016 at +2.028% after the release of the outcome of the meeting, with the FOMC evenly divided over possible benchmark interest rate cut in 2019.

We expect investors to remain keen on safe-haven risk assets of Developed Economies (DMs) in the short term on continued uncertainties of global growth in 2019 and as they evaluate the comments of the U.S. Federal Reserve Bank. We also expect other Central Banks of Developed Economies (DMs) to maintain current dovish monetary policy stance with possible rate cuts and Quantitative Easing (QE) to boost economic activities.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Banking system liquidity opened positive today with ca ₦217.52bn, marginally higher than ca ₦216.80bn it opened at yesterday. The Central Bank of Nigeria (CBN) did not conduct an Open Market Operation (OMO) auction today with market focus on today’s the Primary Market Auction (PMA).

Treasury Bills
The treasury bills secondary market was largely flat today, with market focus on the Primary Market Auction (PMA). There was demand at the long-end of the yield curve with market expectation of lower stop rates at the PMA. Average rates marginally gained ca +1bps day-on-day. Kindly find below a summary of the results of the PMA:

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates traded lower day-on-day at 6.86% and 7.50% from 7.21% and 7.71%. 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 saw mixed trading activity today, with demand on select maturities and some sell-offs on others. Average yields shed ca -10bps day-on-day, with the July 2021 maturity closing at 14.28% from 14.82%


Eurobond

The nation’s Eurobonds market continued to see demand today, with buy pressure for most of the day. Average yields shed ca -13bps day-on-day, with the January 2049 maturity closing at 8.40% from 8.54%.

Equities
The Nigerian equities market continued on a negative note today, with the Nigerian Stock Exchange All Share Index (NSE ASI) marginally shedding ca -0.15% day-on-day to close at 29,772.72pts, and market’s year-to-date returns at -5.27%. This was largely due to losses in Stanbic IBTC Plc (-1.41%), MTN Nigeria Plc (-0.75%) and Dangote Cement Plc (-0.05%).

The NSE Industrial, Consumer goods and Oil & Gas indices shed ca -83bps, -41bps and -65bps respectively, while the Banking index gained ca +134bps. Forte Oil Plc led both the volume and value charts with ca 973.25mn and ₦64.38bn respectively.

The Naira remained flat against the dollar in the interbank and parallel markets at ₦306.95/$1 and ₦362/$1 respectively. It also remained unchanged in the parallel market against the Pound sterling and Euro at ₦463/₤1 and ₦405/€1 respectively. The FMDQ Nigerian Autonomous Foreign Exchange (NAFEX) Fixing rate depreciated marginally day-on-day at ₦360.35/$1 from ₦360.34/$1.

Crude oil prices declined today, despite data released by the Energy Information Administration (EIA) showed U.S crude inventories dropped ca 3.1m barrels week-on-week, more than analyst expectation of ca 1.1m barrels. Brent crude oil price shed ca -0.35%% day-on-day at $61.92pb, while WTI shed ca -0.67% day-on-day at $53.54pb, as at report time. Spot gold shed ca -0.1185% at $1,349.10 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
FO 34.65 3.15 +10.00%
NEM 2.45 0.22 +9.87%
THOMASWY 0.34 0.03 +9.68%
DANGSUGAR 12.00 1.00 +9.09%
ETI 11.00 0.80 +7.84%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
PRESTIGE 0.50 -0.05 -9.09%
PRESCO 50.00 -5.00 -9.09%
CHIPLC 0.20 -0.02 -9.09%
MANSARD 1.79 -0.12 -6.28%
CONOIL 21.65 -1.35 -5.87%
Benchmark T-Bills Discount Rates
19-Jun-19 18-Jun-19 Change in Rates
85 Days                                      . 10.67% 10.67% 0.00%
175 Days- 11.62% 11.61% 0.01%
357 Days. 12.34% 12.34% 0.00%
Source: FMDQ DQL for 19 June 2019
Benchmark FGN Bond Yields
19-Jun-19 18-Jun-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 14.28% 14.82% -0.54%
5 yrs: 15.54% 27-Apr 2023 14.40% 14.37% 0.03%
10 yrs: 13.98% 23 Feb 2027 14.50% 14.55% -0.05%
20 yrs: 16.25% 18-Apr 2037  . 14.77% 14.77% 0.00%
Source: FMDQ DQL for 19 June 2019
Benchmark FGN EuroBond Yields
19-Jun-19 18-Jun-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.40% 4.53% -0.13%
5 yrs: NGERIA 6 3/8 07/12/23 5.28% 5.38% -0.10%
10 yrs: NGERIA 6 1/2 11/28/27 6.95% 7.08% -0.13%
20 yrs: NGERIA 7.696 02/23/38 7.87% 8.01% -0.14%
30 yrs: NGERIA 9.248 01/21/49 8.40% 8.54% -0.14%
Source: FMDQ DQL for 19 June 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.20% 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 43 4.75% 4.78%
17-Oct-19 120 11.40% 11.84%
07-Nov-19 141 11.40% 11.93%
16-Jan-20 211 11.70% 12.55%
Select Macro-economic Indices
Inflation % (April 2019) 11.40 (+0.26% ytd)
PMI (May 2019) 57.80
MPR (%) 13.5 (-5%/+2% around mid-point)
CRR (%) 22.5
Brent Crude Price US$ pbbl 61.92 (-0.35% d/d)
External Reserve (US$’billion) 45.106 (+1.45% ytd)
GDP % (Q1 2019) +2.01% (Q4 2018: +2.38% y/y)
NSE All Share Index (ASI) 29,772.72 (-0.15% d/d; -5.27% ytd)
Market Capitalisation (₦’Trillion) 13.12

Financial Markets Update – 19 JUNE 2019

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