Financial Markets Today

Financial Markets Today

Nigeria’s Federal Government plans to raise 30-year domestic debt in 2019, the first in its history, with previous 30-year issuances raised in the Eurobond markets, information from the Debt Management Office (DMO) indicated today. This comes as part of the government plans to fund the debt portion of the proposed 2019 budget deficit of ca ₦1.649 billion, with equal half borrowings from both domestic and foreign issuances and of which the domestic portion of ca ₦824 billion is expected to include issuances of both Sukuk and Green bonds, while the foreign portion is expected to largely be through concessionary loans in order to reduce rising financing cost.

 

With the announcement of the introduction of a new long-tenored debt instrument, we expect volatile trading in the domestic debt market to continue this week, with investors weighing the potential impact of announced government borrowing plans for 2019 on interest rate levels, and possible timing of the conduct of the auction for the new 30-year debt.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Banking system liquidity opened on a positive note today, at ca ₦118bn from previous day’s opening of ₦131.232bn. There was Open Market Operation (OMO) auction today by the Central Bank of Nigeria (CBN) where a total of ₦200.97bn was sold.

Treasury Bills
The treasury bills secondary market today reacted to the announcement of an Open Market Operation (OMO) auction by the CBN as average rate gained ca +5bps day-on-day. The 15 August 2019 maturity moved the most to close at 12.20% from 11.84%. Please find below a summary of the results of today’s OMO auction:

Tenor 86-Days 163-Days 352-Days
Maturity Date: 27-Jun-19 12-Sep-19 19-Mar-20
Amount Offered: ₦ 30.000 billion ₦ 70.000 billion ₦ 100.000 billion
Subscription: ₦ 16.610 billion ₦ 4.890 billion ₦ 310.340 billion
Amount Allotted: ₦ 15.860 billion ₦ 4.890 billion ₦ 304.750 billion
Range of bids: 11.6900% – 13.0000% 12.7000% – 13.0000% 12.8800% – 13.5000%
Stop Rates 11.7800% 13.0000% 13.0400%

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates rose day-on-day to 19.71% and 20.86% from 16.71% and 17.50%, 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 7.50% for 30 – 60 days tenor on ₦10mln – ₦100mln.

Bonds
The bonds secondary market traded on a very volatile note today as investors reacted to the announcement of an Open Market Operation (OMO) auction by the Central Bank (CBN), with sell offs seen across the curve. Average yields gained ca +1bps day-on-day with March 2036 closing at 14.55% from 14.34%.

Eurobonds

A slight sell off in the nations Eurobonds market today as average yields gained +3bps day-on-day. Most activities was seen at the long-end of the curve with the January 2049 closing at 8.26% from 8.22%.

Equities
The Nigerian equities market continued its downward slide today as the Nigerian Stock Exchange All Share Index (NSE ASI) shed ca -0.39% day-on-day to close at 29,553.12pts, and market’s year-to-date returns declined further to -5.97%. This was majorly on the back of losses in Dangote Cement Plc (-0.53%).

The NSE Banking, Consumer Goods and Industrial indices all lost ca -37bps, -45bps and -45bps respectively, while the NSE Oil & Gas index gained ca +45bps. Sterling Bank Plc led the volume chart with 124.8m units while Zenith Bank Plc led the value chart with ca ₦653.9mn worth of trades.

The Naira remained stable against the dollar in both the interbank and parallel markets today, at ₦306.95/$1 and ₦360/$1 respectively. It was also stable against the Pound sterling and the Euro at ₦475/₤1 and ₦405/€1 respectively, in the parallel market. No changes in the Nigerian Autonomous Foreign Exchange (NAFEX) window as Naira remained unchanged against the Dollar at ₦360.39/$1.

Brent oil prices rose today, resuming their climb toward $70 per barrel as expectations of tight global supply outweighed pressure from rising U.S. production and less robust global demand indicators. Brent crude oil price gained ca +0.58% at $69.71pb, while WTI gained ca +0.02% at $62.7pb, as at report time. Spot gold dipped to a 4-week low shedding ca -0.06% at $1,282.39 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
CHAMS 0.20 0.02 +10.00%
FO 24.95 2.45 +9.82%
VITAFOAM 3.57 0.28 +7.84%
CORNERST 0.21 0.01 +4.76%
OANDO 4.80 0.15 +3.13%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
CAP 37.40 -3.70 -9.89%
UNITYBNK 0.86 -0.08 -9.30%
ETERNA 4.35 -4.35 -8.05%
REGALINS 0.25 -0.25 -8.00%
UNIONDAC 0.25 -0.25 -8.00%
Benchmark T-Bills Discount Rates
04-Apr-19 03-Apr-19 Change in Rates
63Days                                      . 11.92% 11.79% 0.13%
154Days- 13.18% 13.10% 0.08%
329Days. 12.92% 12.84% 0.08%
Source: FMDQ DQL for 04 April 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
04-Apr-19 03-Apr-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 14.44% 14.47% -0.03%
5 yrs: 15.54% 27-Apr 2023 14.31% 14.27% 0.14%
10 yrs: 16.29% 17 Mar 2027 14.53% 14.38% 0.15%
20 yrs: 16.25% 18-Apr 2037  . 14.38% 14.29% 0.09%
Source: FMDQ DQL for 04 April 2019
Benchmark FGN EuroBond Yields
04-Apr-19 03-Apr-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.91% 4.89% 0.02%
5 yrs: NGERIA 6 3/8 07/12/23 5.48% 5.46% 0.02%
10 yrs: NGERIA 6 1/2 11/28/27 6.68% 6.65% 0.03%
20 yrs: NGERIA 7.696 02/23/38 7.75% 7.72% 0.03%
30 yrs: NGERIA 9.248 01/21/49 8.26% 8.22% 0.04%
Source: FMDQ DQL for 04 April 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.68% 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-19 119 11.50% 11.95%
17-Oct-19 196 12.40% 13.28%
07-Nov-19 217 12.40% 13.39%
16-Jan-20 287 12.30% 13.62%

 

Select Macro-economic Indices
Inflation % (February 2019) 11.31 (-1.14% ytd)
PMI (March 2019) 57.40
MPR (%) 14 (-5%/+2% around mid-point)
CRR (%) 22.5
Brent Crude Price US$ pbbl 69.71 (+0.58% d/d)
External Reserve (US$’billion) 44.648 (+3.55% ytd)
GDP % (Q4 2018) +2.38% (Q3 2018: +1.81% y/y)
NSE All Share Index (ASI) 29.553.12 (-0.39% d/d; -5.97% ytd)
Market Capitalisation (₦’Trillion) 11.10

 

Financial Markets Update – 04 April 2019

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