Financial Markets Today
Global crude oil prices rallied to their highest in 2019 today, reaching its highest levels in 5-months, with Brent crude oil price rising to ca $69.50 per barrel on expected improved supply cuts by the Organisation of Petroleum Exporting Countries (OPEC). This comes as a Reuters survey indicated that crude oil supply from OPEC in March 2019 declined to its lowest in 4-years on the back of higher-than-expected supply cuts by OPEC’s largest oil exporter – Saudi Arabia and involuntary supply cuts due to rising impact of sanctions on Venezuela and Iran.
With expected further drop in crude oil export from Saudi Arabia in April at ca 7 million barrels per day vs ca 10 million barrels per day in 2018, we expect continued positive investors’ sentiments to keep crude oil prices elevated in the near term, with Brent crude oil price ranging ca $70 – $75 in the near term.
MONEY MARKETS
CAPITAL MARKETS
FOREIGN EXCHANGE
COMMODITIES
Banking system liquidity opened on a positive note today, at ca ₦370.826bn from previous day’s opening of ₦316.507bn. There was Open Market Operation (OMO) auction today by the Central Bank of Nigeria (CBN) where a total of ca ₦325bn was sold.
Treasury Bills
The bullish trend was reversed in the treasury bills secondary market today as the Central Bank of Nigeria (CBN) conducted an Open Market Operation (OMO) auction. Most of today’s activities was seen on the short-to-mid dated maturities, with average rates gaining ca +2bps day-on-day. The 06 June 2019 maturity traded the most to close at 11.85% from 11.80%. Please find below a summary of the result 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 16.57% and 17.43% from 5.00% and 5.57%, 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 7.00% for 30 – 60 days tenor on ₦10mln – ₦100mln.
Bonds
The bonds secondary market continued the week on a quiet note with only a few activities seen on select papers and average yields gaining ca +5bps day-on-day. Most of markets activities were at the mid-to-long end of the curve with Feb 2028 trading the most to close at 14.38%.
Eurobonds
As crude oil prices continue to strengthen, interest in the nations Eurobonds also improved as average yield shed ca -7bps day-on-day. The January 2021 saw a lot of interest, closing at 4.91% from 4.94%.
Equities
The Nigerian equities market continued its decline today, with the Nigerian Stock Exchange All Share Index (NSE ASI) shedding ca -0.99% day-on-day to close at 30,226.77pts, and market’s year-to-date returns at -3.33%. This was largely on the back of losses in Nigerian Breweries Plc (-9.68%), Zenith Bank Plc (-2.74%) and Nestle Nigeria Plc (-3.45%).
The NSE Banking, Oil & Gas and Consumer Goods indices all lost -111bps, -175bps, and -384bps respectively, while Industrial index gained 14bps. FCMB Plc led the volume chart with 53.88m while Nestle Plc led the value charts with ₦905.17mn.
The Naira remained stable against the dollar in both the interbank and parallel markets today, at ₦306.95/$1 and ₦360/$1 respectively. It also remained unchanged against the Pound sterling and the Euro at ₦476/₤1 and ₦405/€1 respectively in the parallel market, and remained stable at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦360.50/$1.
Oil prices reached their highest of 2019 today, with Brent crude approaching $70 per barrel on the prospect that more sanctions against Iran and further Venezuelan disruptions could deepen an OPEC-led supply cut. Brent crude oil price gained ca +0.39% at $69.28pb, while WTI gained ca +1.22% at $62.34pb, as at report time. Spot gold lost ca -0.02% to $1,293.90 per ounce.
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| Benchmark T-Bills Discount Rates | ||||
| 02-Apr-19 | 01-Apr-19 | Change in Rates | ||
| 65Days . | 11.86% | 11.69% | 0.17% | |
| 156Days- | 13.15% | 13.11% | 0.04% | |
| 331Days. | 12.82% | 12.67% | 0.15% | |
| Source: FMDQ DQL for 02 April 2019 *T-Bills Discount Rates are slightly different from current market rates |
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| Benchmark FGN Bond Yields | ||||
| 02-Apr-19 | 01-Apr-19 | Change in Yield | ||
| 3 yrs: 16.00% 15-Jul-2021 | 14.47% | 14.47% | 0.00% | |
| 5 yrs: 15.54% 27-Apr 2023 | 14.27% | 14.17% | 0.10% | |
| 10 yrs: 16.29% 17 Mar 2027 | 14.38% | 14.44% | -0.06% | |
| 20 yrs: 16.25% 18-Apr 2037 . | 14.18% | 14.18% | 0.00% | |
| Source: FMDQ DQL for 02 April 2019 | ||||
| Benchmark FGN EuroBond Yields | ||||
| 02-Apr-19 | 01-Apr-19 | Change in Yield | ||
| 3 yrs: NGERIA 6 3/4 01/28/21 | 4.91% | 4.94% | -0.03% | |
| 5 yrs: NGERIA 6 3/8 07/12/23 | 5.47% | 5.47% | 0.00% | |
| 10 yrs: NGERIA 6 1/2 11/28/27 | 6.62% | 6.62% | 0.00% | |
| 20 yrs: NGERIA 7.696 02/23/38 | 7.71% | 7.72% | -0.01% | |
| 30 yrs: NGERIA 9.248 01/21/49 | 8.21% | 8.20% | 0.01% | |
| Source: FMDQ DQL for 02 April 2019 | ||||
| AIICO Money Market Fund (AMMF) | |
| Net Yield (As at current date) | 13.78% 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 | 121 | 11.40% | 11.85% |
| 17-Oct-19 | 198 | 12.40% | 13.29% |
| 07-Nov-19 | 219 | 12.40% | 13.40% |
| 16-Jan-20 | 289 | 12.25% | 13.57% |
| 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 | 69.28 (+0.39% d/d) |
| External Reserve (US$’billion) | 44.34 (+2.84% ytd) |
| GDP % (Q4 2018) | +2.38% (Q3 2018: +1.81% y/y) |
| NSE All Share Index (ASI) | 30,226.77 (-0.99% d/d; -3.38% ytd) |
| Market Capitalisation (₦’Trillion) | 11.35 |
Financial Markets Update – 02 April 2019
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This document has been issued and approved by AIICO Capital and is based on information from various sources that we believe are reliable. However, no representation is made that it is accurate or complete. While reasonable care has been taken in preparing this document, no responsibility or liability is accepted for errors or fact or for any opinion expressed herein. This document is for information purposes only. It does not constitute any offer or solicitation to any person to enter into any trading transaction.
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