Financial Markets Today

Financial Markets Today

Yields of government treasuries in developed economies dropped to their lowest in 12-months today, after the U.S. Federal Reserve Bank (Fed) further deepened its dovish monetary stance, cutting its rate-hike outlook for 2019 to zero from 2-times previously forecast, and also forecasting only 1 rate-hike for 2020. The Fed also lowered its economic growth forecast to 2.1% vs previous 2.3% with U.S. inflation expected at 1.8%, below its 2% target. Yields on the 10yr U.S. treasury, German 10yr treasury, and UK 10yr treasury all declined to ca +2.541%, +0.078% and +1.146%, on increased investors’ interest in safe-haven risk assets.

 

We expect the dovish monetary stance of the U.S. Federal Reserve Bank, and earlier dovish stance of other Apex banks of developed economies (DMs) to keep interest rates in DMs at current low levels through 2019. We also expect this to further increase investors’ interest in safe-haven risk assets in the near term.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Liquidity in the banking system opened positive today, at ca ₦199.864bn from yesterday’s opening levels of ca ₦294.36bn. There was no OMO auction conducted by the Central Bank of Nigeria (CBN) today.

Treasury Bills
A more active trading day in the treasury bills secondary market today, with most activities seen at the short-to-mid end of the curve. Average rates dropped ca -2bps day-on-day, with the 29 August 2019 maturity trading the most to close at 13.07%. Please find below the a summary of the results of the Primary Market Auction (PMA) held today:

Tenor 91-Days 182-Days 364-Days
Maturity Date: 20-Jun-19 19-Sep-19 19-Mar-20
Amount Offered: ₦ 3.000 billion ₦ 8.385 billion ₦ 37.176 billion
Subscription: ₦ 7.851 billion ₦ 30.073 billion ₦ 220.615 billion
Amount Allotted: ₦ 3.000 billion ₦ 8.385 billion ₦ 37.176 billion
Range of bids: 10.3000% – 14.0000% 11.5000% – 13.5200% 11.5900% – 14.5000%
Stop Rates 10.3000% 12.2000% 12.3450%

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates dropped day-on-day to 10.17% and 11.17% from 12.00% and 12.67%. 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
A relatively quiet trading day in the domestic bonds secondary market today. Activities was seen at the long-end of the curve, with average yield dropping ca -3bps day-on-day. The March 2036 maturity trading the most to close at 14.18% from 14.27%.

Eurobonds

A relatively bearish trading day in the nation’s Eurobonds market today, with average yield gaining ca +2bps day-on-day, particularly the February 2038 maturity which gained ca +3bps day-on-day.

Equities
The Nigerian equities market declined for a 5th consecutive trading day today, with the Nigerian Stock Exchange All Share Index (NSE ASI) losing ca -0.13% day-on-day to close at 31,040.84pts, with market’s year-to-date returns at -1.24%. This was largely on the back of price decline in Nigerian Breweries Plc (-0.71%), Guaranty Trust Bank Plc  (-0.14%), Nestle Nigeria Plc (-1.74%) and Stanbic IBTC Holding Plc (-1.67%).

The NSE Consumer Goods, Industrial and Oil & Gas indices all lost ca -94bps, -45bps and -62bps respectively, while the NSE Banking index gained ca +91bps. Access Bank Plc led both the volume and value charts with 83.20m units traded at ₦529.94mn.

The Naira remained stable against the dollar at the interbank market window today, at ₦306.90/$1. In the parallel market, it remained stable against the Dollar at ₦360/$1, appreciated against the Pound Sterling ₦473/₤1 from ₦475/₤1, while and depreciating against the Euro at ₦408/€1 from ₦405/€1. The Naira appreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦360.10/$1 from ₦360.21/$1.

Crude oil prices rose to its highest since October 2018 today, as the U.S. Energy Information Administration (EIA) indicated a sharp drop in Shale stockpiles week-on-week of ca 9.6 million barrels vs analyst expectation of 309,000 barrels. Brent crude oil price gained ca +1.09% at $68.35pb, while WTI crude gained ca +1.85% at $60.12pb, as at report time. Spot gold gained ca +0.55% day-on-day at $1,313.70 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
NIGERINS 0.21 0.02 +9.52%
ACCESS 5.95 0.55 +9.24%
FIDELITYBK 2.21 0.20 +9.05%
WEMABANK 0.74 0.03 +4.05%
UACN 7.70 0.30 +3.90%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
CUTIX 2.05 -0.20 -9.76%
BETAGLAS 79.00 -7.05 -8.92%
AIICO 0.71 -0.06 -8.45%
CADBURY 12.00 -1.00 -8.33%
IKEJAHOTEL 1.70 -0.14 -8.24%
Benchmark T-Bills Discount Rates
20-Mar-19 19-Mar-19 Change in Rates
78Days                                      . 12.15% 12.20% -0.05%
169Days- 13.02% 13.10% -0.05%
344Days. 12.57% 12.56% 0.01%
Source: FMDQ DQL for 20 March 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
20-Mar-19 19-Mar-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 14.73% 14.73% 0.00%
5 yrs: 15.54% 27-Apr 2023 14.46% 14.50% -0.04%
10 yrs: 16.29% 17 Mar 2027 14.40% 14.47% -0.07%
20 yrs: 16.25% 18-Apr 2037  . 14.12% 14.13% -0.01%
Source: FMDQ DQL for 20 March 2019
Benchmark FGN EuroBond Yields
20-Mar-19 19-Mar-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.84% 4.82% -0.02%
5 yrs: NGERIA 6 3/8 07/12/23 5.37% 5.36% -0.01%
10 yrs: NGERIA 6 1/2 11/28/27 6.63% 6.60% -0.03%
20 yrs: NGERIA 7.696 02/23/38 7.70% 7.67% -0.03%
30 yrs: NGERIA 9.248 01/21/49 8.16% 8.14% -0.02%
Source: FMDQ DQL for 20 March 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.40% 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-19 134 11.35% 11.84%
17-Oct-19 211 12.50% 13.47%
07-Nov-19 232 12.55% 13.64%
16-Jan-20 302 12.25% 13.63%

 

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 68.35 (+1.09% d/d)
External Reserve (US$’billion) 43.41 (+0.68% ytd)
GDP % (Q4 2018) +2.38% (Q3 2018: +1.81% y/y)
NSE All Share Index (ASI) 31,040.84 (-0.13% d/d; -1.24% ytd)
Market Capitalisation (₦’Trillion) 11.58

Financial Markets Update – 20 March 2019

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