Financial Markets Today

Financial Markets Today

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) concluded its fifth policy meeting of 2019 on Friday, retaining all key policy rates. The MPC retained the Monetary Policy Rate (MPR), Cash Reserve Ratio (CRR) and Liquidity ratio at 13.5%, 22.5% and 30% respectively, while maintaining an asymmetric corridor at +200/–500 basis points around the MPR. Key considerations by the MPC included persisting global financial vulnerabilities and rising geo-political tensions, positive moderation in inflation to 11.02% in August 2019 and the pressure on the nation’s FX reserves.

We expect the Central Bank (CBN) policy committee (MPC) to maintain current monetary stance in near term, as it seeks clearer understanding of the quantum and timing of liquidity injections into or possible outflows from the economy, particularly on possible re-escalation of U.S./China trade tensions, renewed flight to safety by investors and increased pressure on the nation’s FX reserves.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Amount of money in the banking system was expected to open on a lower but positive note, after Thursday’s conduct of an Open Market Operation by the Central Bank (CBN) to reduce interbank system liquidity. The CBN did not conduct an OMO auction today.

Treasury Bills
Trading activities in the treasury bills secondary market closed the week on a relatively quiet note, with mixed sentiments seen across the curve. Average rates gained ca +4bps day-on-day with the 20 February 2020 maturity closing at 12.75% from 12.73%.

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates traded lower day-on-day at 6.43% and 7.57% from 16.86% and 18.07% 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 domestic bonds secondary market closed the week on a relatively quiet note, as investors traded with caution looking forward to the outcome of the Monetary Policy Committee(MPC) meeting which ended today. Average yields remained unchanged day-on-day, with the January 2049 maturity closing at 14.45%.

Eurobond

The nation’s Eurobonds market ended the week on a bullish note on Friday, with demand seen across the yield curve. Average yield dropped ca -7bps day-on-day with the January 2049 maturity closing at 8.03% from 8.09%.

Equities
The domestic equities market closed the week on a positive note, as the Nigerian Stock Exchange All Share Index (NSE ASI) gained ca +0.19% day-on-day to close at 27,698.69pts, with market’s year-to-date returns at -11.87%. This was mainly due to gains in Nestle Nigeria Plc (+0.83%) and Stanbic IBTC Holdings Plc (+7.26%).

The NSE Oil & Gas and Consumers Goods indices gained ca +54bps and +90bps, while the NSE Banking and Industrial Goods indices lost ca -115bps and -37bps day-on-day respectively. Nigeria Breweries Plc led the volume chart with ca 81.85m units while Nestle Nigeria Plc led the value chart with ₦2.54bn worth of trades.

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 appreciated against the Pound Sterling to close at ₦450/₤1 from ₦452/₤1 while it depreciated against the Euro day-on-day to close at ₦397/€1 from ₦396/€1.The FMDQ Nigerian Autonomous Foreign Exchange (NAFEX) Fixing rate slightly depreciated day-on-day to close at ₦361.94/$1 from ₦361.91/$1.

Crude oil Prices ended the week on a positive note, to make the week its largest gain since January. This is due to increased Middle Eastern tensions and a cut in Saudi Arabia’s oil production following last weekend attacks. Brent crude oil price gained ca +1.12% day-on-day at $65.12pb, while WTI gained ca +1.36% day-on-day at $58.92pb, as at report time. Spot Gold gained ca +0.30% at $1,510.70 per ounce as at report time.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
CUTIX 1.56 0.14 +9.86%
UPL 1.15 0.10 +9.52%
UNITYBNK 0.68 0.05 +7.94%
CAVERTON 2.53 0.18 +7.66%
STANBIC 42.85 2.90 +7.26%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
PORTPAINT 2.23 -0.24 -9.72%
ETERNA 2.75 -0.25 -8.33%
ABCTRANS 0.33 -0.03 -8.33%
LASACO 0.28 -0.02 -6.67%
CADBURY 10.95 -0.70 -6.01%
Benchmark T-Bills Discount Rates
  20-Sep-19 19-Sep-19 Change in Rates
90 Days 11.81 11.73% 0.08%  
181 Days 12.11 12.15% -0.04%  
356 Days 13.30 13.25% 0.05%  
Source: FMDQ DQL for 20 September 2019
Benchmark FGN Bond Yields
  20-Sep-19 19-Sep-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 14.57% 14.30% 0.27%  
5 yrs: 15.54% 27-Apr 2023 14.35% 14.35% 0.00%  
10 yrs: 13.98% 23-Feb 2028 14.25% 14.19% 0.06%  
20 yrs: 16.25% 18-Apr 2037 14.29% 14.29% 0.00%  
30 yrs: 14.80% 26-Apr 2049 14.45% 14.45% 0.00%  
Source: FMDQ DQL for 20 September 2019
Benchmark FGN EuroBond Yields
  20-Sep-19 19-Sep-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.03% 4.13% -0.10%  
5 yrs: NGERIA 6 3/8 07/12/23 4.83% 4.88% -0.05%  
10 yrs: NGERIA 6 1/2 11/28/27 6.16% 6.25% -0.09%  
20 yrs: NGERIA 7.696 02/23/38 7.35% 7.42% -0.07%  
30 yrs: NGERIA 9.248 01/21/49 8.03% 8.09% -0.06%  
Source: FMDQ DQL for 20 September 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 12.32% 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 11.75 % 11.91%
16-Jan-20 120 12.30% 12.82%
28-May-20 253 12.65% 13.87%
13-Aug-20 330 12.85% 14.54%
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 64.15 (-0.39% 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) 27,698.69 (+0.19% d/d; -11.87 ytd)
Market Capitalisation (₦’Trillion) 13.48

Financial Markets Update – 20 SEPTEMBER 2019
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