Financial Markets Today

Financial Markets Today

Global equities market appreciated on Thursday, with the U.S. Dow Jones Industrial Average (DJIA), S & P 500, NASDAQ, German DAX, London’s FTSE and Chinese SHANGHAI indices all gaining ca +0.23%, +0.30%, +0.32%, +0.55%, +0.58% and +0.46% respectively. This comes on the back of reactions by investors to series of recent expansionary monetary policy actions by Central banks of Developed Economies (DMs), as the U.S. Federal Reserve Bank deepened its monetary policy stance, cutting its benchmark policy rate by 25bps, a week after the European Central Bank (ECB) also cut its benchmark deposit rate by 10bps.

We expect continued cautious rise in investors’ risk-on sentiments, particularly as both the U.S. and China set to meet early October to resume trade negotiations. We also expect continued volatility in global financial markets in the near term as investors’ continue to evaluate potential impact of current expansionary monetary policies and fiscal stimulus in Developed Economies (DMs) to boost global economic growth.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Amount of money in the banking system opened Thursday on a positive note, at ca ₦394.61bn higher than yesterday’s opening of at ca ₦48.62bn, boosted by Open Market Operation (OMO) maturities of ca ₦356bn. The CBN conducted an OMO auction today offering a total volume of ₦300bn.

Treasury Bills
The treasury bills secondary market closed the day on a slightly bearish note, as the Central Bank Of Nigeria (CBN) conducted an Open Market Operation (OMO) auction offering a total volume of ₦300bn. Average rates gained ca +5bps day-on-day with the 20 February 2020 maturity closing at 12.75% from 12.73%. Please find below a summary of the results of the OMO auction conducted today:

Tenor 91-Days 175-Days 364-Days
Maturity Date: 19-Dec-19 12-Mar-20 17-Sep-20
Amount Offered: ₦50.00 billion ₦50.00 billion ₦200.00 billion
Subscription ₦1.027 billion ₦0.052 billion ₦491.40 billion
Amount Allotted: ₦1.027 billion ₦0.052 billion ₦350.00 billion
Range of bids 11.5900% – 11.5900% 11.7900% – 11.7900% 13.4300% – 13.5000%
Stop Rate 11.5900% 11.7900% 13.5000%

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates traded higher day-on-day at 16.86% and 18.07% from 14.57% and 15.57% 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
The domestic bonds secondary market ended the day on a quiet note, with some activity seen at the mid-to-long end of the curve as Investors re-invested their coupon payment. Average yields remained were unchanged day-on-day, with the January 2049 maturity closing at 14.45%.

Eurobond

The nation’s Eurobonds market ended trading day on a bullish note. Demand was seen across the curve, as market reacted to another rate cut by the U.S Federal Reserve Bank. Average yield dropped ca -4bps day-on-day with the January 2049 maturity closing at 8.09% from 8.15%.

Equities
The domestic equities market closed the day on a negative note, as the Nigerian Stock Exchange All Share Index (NSE ASI) lost ca -0.31% day-on-day to close at 27,646.15pts, while market’s year-to-date returns stands at -12.04%. This was mainly due to losses in Guaranty Trust Bank Plc (-1.85%) and Zenith Bank Plc (-1.81%).

The NSE Banking index lost ca -150bps while the NSE Oil & Gas, Consumer Goods and Industrial Indices gained ca +14bps, +62bps and +6bps respectively. First Bank Of Nigeria Holdings Plc led both the volume and value charts with ca 71.52m units traded at ca ₦390.06mn.

The Naira remained stable against the dollar day-on-day in both the interbank and parallel market to close at ₦306.90/$1 and ₦360/$1 respectively. In the parallel market, it also remained unchanged against the Pound Sterling to close at ₦450/₤1 while it depreciated against the Euro day-on-day to close at ₦396/€1 and ₦395/€1. The FMDQ Nigerian Autonomous Foreign Exchange (NAFEX) Fixing rate slightly depreciated day-on-day to close at ₦361.91/$1 from ₦361.90/$1.

Oil Prices rose on Thursday, on continued fears of a shortfall in global supply, following last weekend attacks on Saudi Arabia’s 2nd largest crude oil producing facility. Brent crude oil price gained ca +1.70% day-on-day at $64.68pb, while WTI gained ca +0.64% day-on-day at $58.47pb, as at report time. Spot Gold shed ca -0.55% at $1,507.40 per ounce as at report time.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
CHIPLC 0.33 0.03 +10.00%
UACN 7.75 0.70 +9.93%
LINKASSURE 0.56 0.05 +9.80%
CONTINSURE 1.57 0.14 +9.79%
PZ 7.05 0.60 +9.30%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
UPL 1.05 -0.10 -8.70%
NEIMETH 0.44 -0.04 -8.33%
CUTIX 1.42 -0.12 -7.79%
ABCTRANS 0.36 -0.03 -7.69%
CHAMS -0.02 -0.02 -7.69%
Benchmark T-Bills Discount Rates
19-Sep-19 18-Sep-19 Change in Rates
91 Days
11.73%
11.52% 0.21%
175 Days
12.15%
12.30% -0.15%
357 Days
13.25%
13.40% -0.15%
Source: FMDQ DQL for 19 September 2019
Benchmark FGN Bond Yields
19-Sep-19 18-Sep-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 14.30% 14.30% 0.00%
5 yrs: 15.54% 27-Apr 2023 14.35% 14.32% 0.03%
10 yrs: 13.98% 23-Feb 2028 14.19% 14.29% -0.10%
20 yrs: 16.25% 18-Apr 2037 14.29% 14.39% -0.10%
30 yrs: 14.80% 26-Apr 2049 14.45% 14.48% -0.03%
Source: FMDQ DQL for 19 September 2019
Benchmark FGN EuroBond Yields
19-Sep-19 18-Sep-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.13% 4.17% -0.04%
5 yrs: NGERIA 6 3/8 07/12/23 4.88% 4.91% -0.03%
10 yrs: NGERIA 6 1/2 11/28/27 6.25% 6.30% -0.05%
20 yrs: NGERIA 7.696 02/23/38 7.42% 7.46% -0.04%
30 yrs: NGERIA 9.248 01/21/49 8.09% 8.15% -0.06%
Source: FMDQ DQL for 19 September 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 12.30% 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
31-Oct-19 43 11.70 % 11.86%
16-Jan-20 120 12.05% 12.55%
28-May-20 253 12.65% 13.87%
13-Aug-20 330 12.90% 14.60%
Select Macro-economic Indices
Inflation % (August 2019) 11.02 (-3.08% ytd)
PMI (August 2019) 57.90
MPR (%) 13.5 (-5%/+2% around mid-point)
CRR (%) 22.5
Brent Crude Price US$ pbbl 64.68 (-1.70% d/d)
External Reserve (US$’billion) 42.461 (+1.40% ytd)
GDP % (Q2 2019) +1.94% (Q1 2019: +2.10% y/y)
NSE All Share Index (ASI) 27,646.15 (+0.13% d/d; -12.04 ytd)
Market Capitalisation (₦’Trillion) 13.46

Financial Markets Update – 18 SEPTEMBER 2019

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