Financial Markets Today

Financial Markets Today

Global crude oil prices rose to a 1-month high and its biggest daily gain in 2019 today, with Brent crude oil price gaining ca 4.5% day-on-day to trade at ca $64.57 per barrel, on further escalation of U.S./Iran tensions after the U.S. President – Donald Trump indicated a possible retaliation from the U.S. to Iranian attack on its surveillance drone in the middle east. This comes after recent attacks on 2 oil tankers in the gulf region, further raising potential threats to crude oil flow through key chokepoint in the Strait of Hormuz, and a possible dampening of ca 20% of global crude oil supplies flowing through the checkpoint.

We expect current rally in crude oil prices to be sustained in the short term, with further escalation of U.S./Iran tensions and today’s decision by Gulf oil producers to maintain current production-cut levels in July, expected to support the rally in Brent crude oil price.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Banking system liquidity opened positive today with ca ₦182.21bn lower than ca ₦217.52bn, with no major funding need by the banks. The Central Bank of Nigeria (CBN) did not conduct an Open Market Operation (OMO) auction today due to the primary market auction.

Treasury Bills
Mixed sentiments in treasury bills secondary market today, as investors continue to trade cautiously in anticipation of an OMO auction. Despite positive interbank liquidity, average yields marginally shed ca -1bps day-on-day with the 30 January 2020 maturity closing at 12.15% from 12.18%.

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates traded lower day-on-day at 4.43% and 5.00% from 6.86% and 7.50%. 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 very few trades today, with demand on the mid-to-long dated maturities. Average yields shed ca -3bps day-on-day with the February 2028 paper closing at 14.48% from 14.50%.


Eurobond

The nation’s Eurobonds market opened much lower today, as market reacted to U.S. Federal Reserve Bank dovish tone from its meeting concluded yesterday. Investors showed strong appetite for emerging markets assets, as the Nigerian yield curve shed more than ca -30bps day-on-day, with the January 2049 paper closing at 8.13% from 8.40%.

Equities
The Nigerian equities market declined further today, with the Nigerian Stock Exchange All Share Index (NSE ASI) marginally shedding ca -0.02% day-on-day to close at 29,765.31pts, and market’s year-to-date returns at -5.30%. This was mainly due to losses in MTN Nigeria Plc (-1.52%), Zenith Bank Plc (-0.99%) and Stanbic IBTC Holding Plc (-0.95%).

The NSE Industrial, Consumer goods and Banking indices gained ca +190bps, +44bps and +63bps respectively, while the Oil & Gas index lost ca -105bps. Sterling Bank Plc led the volume chart with ca 54.96m units while Guaranty Trust Bank Plc led the value chart with ca ₦801.30m worth of trades.

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 appreciated marginally day-on-day at ₦360.33/$1 from ₦360.35/$1.

Crude oil prices surged today, rallying to its highest in 1 month, after the U.S. President – Donald Trump criticized h Iranian attack on its surveillance drone, raising fears of a possible retaliation by the U.S. Brent crude oil price gained ca +4.45%% day-on-day at $64.57pb, while WTI gained ca +5.80% day-on-day at $56.88pb, as at report time. Spot gold also gained ca +3.31% at $1,393.50 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
WAPCO 10.50 0.95 +9.95%
LINKASSURE 0.61 0.05 +8.93%
THOMASWY 0.37 0.03 +8.82%
MANSARD 1.94 0.15 +8.38%
NEM 2.65 0.20 +8.16%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
CILEASING 5.67 -0.63 -10.00%
FO 31.20 -3.45 -9.96%
WAPIC 0.41 -0.04 -8.89%
COURTVILLE 0.21 -0.02 -8.70%
NEIMETH 0.52 -0.04 -7.14%
Benchmark T-Bills Discount Rates
20-Jun-19 19-Jun-19 Change in Rates
84 Days                                      . 10.50% 10.67% -0.17%
175 Days- 11.62% 11.62% 0.00%
357 Days. 12.01% 12.34% -0.33%
Source: FMDQ DQL for 20 June 2019
Benchmark FGN Bond Yields
20-Jun-19 19-Jun-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 14.63% 14.28% 0.35%
5 yrs: 15.54% 27-Apr 2023 14.34% 14.40% -0.06%
10 yrs: 13.98% 23 Feb 2027 14.48% 14.50% -0.02%
20 yrs: 16.25% 18-Apr 2037  . 14.77% 14.77% 0.00%
Source: FMDQ DQL for 20 June 2019
Benchmark FGN EuroBond Yields
20-Jun-19 19-Jun-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.10% 4.40% -0.30%
5 yrs: NGERIA 6 3/8 07/12/23 4.99% 5.28% -0.29%
10 yrs: NGERIA 6 1/2 11/28/27 6.63% 6.95% -0.32%
20 yrs: NGERIA 7.696 02/23/38 7.60% 7.87% -0.27%
30 yrs: NGERIA 9.248 01/21/49 8.13% 8.40% -0.27%
Source: FMDQ DQL for 20 June 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.21% 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 42 4.75% 4.78%
17-Oct-19 119 11.20% 11.62%
07-Nov-19 140 11.40% 11.92%
16-Jan-20 210 11.75% 12.60%
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 64.57 (+4.45% d/d)
External Reserve (US$’billion) 45.095 (+1.43% ytd)
GDP % (Q4 2018) +2.01% (Q4 2018: +2.38% y/y)
NSE All Share Index (ASI) 29,765.31 (-0.02% d/d; -5.30% ytd)
Market Capitalisation (₦’Trillion) 13.12

Financial Markets Update – 20 June 2019

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