Financial Markets Today

Financial Markets Today

Global equities markets rallied today, with the U.S. Dow Jones Industrial Average (DJIA), S & P 500, NASDAQ, London’s FTSE, Chinese SHANGHAI and Japanese NIKKEI indices gaining ca +0.59%, +0.80%, +1.05%, +0.88%, +0.35% and +0.20%. This comes after the U.S. Federal Reserve Bank (Fed) deepened its dovish monetary stance, indicating it will maintain current dovish stance though 2019, and further supported by today’s decision by the Bank of England (BOE) to hold its benchmark interest at 0.75%, after it downgraded its economic growth outlook for 2019 to 1.2% from 1.7%.

 

With continued expectation of a slowdown in global economic growth for 2019, continued dovish monetary stance by Central Banks of developed economies (DMs) and persisting uncertainties of a resolution to U.S./China trade negotiations, we expect this to further spur investors’ interest in safe-haven risk assets of DMs in the near term.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Liquidity in the banking system opened positive today, at ca ₦188.15bn from yesterday’s opening levels of ca ₦199.86bn. The Central Bank of Nigeria (CBN) held an Open Market Operation (OMO) auction today, selling a total of ₦293.38bn at a maximum rate of 13.04% on the 350-day maturity.

Treasury Bills
A bearish day in the treasury bills secondary market today despite relatively less transactions. Investors reacted to the Central Bank (CBN)’s announcement of an Open Market Operation (OMO) auction, offering the long-end 350-day maturity for the 1st time in 2 weeks. Average rates gained +27bps day-on-day, with the 29 August 2019 maturity trading the most to close at 13.48% from 13.07%.

Tenor 91-Days 182-Days 350-Days
Maturity Date: 20-Jun-19 19-Sep-19 05-Mar-20
Amount Offered: ₦ 30.000 billion ₦ 70.000 billion ₦ 100.000 billion
Subscription: ₦ 15.040 billion ₦ 79.470 billion ₦ 381.950 billion
Amount Allotted: ₦ 15.040 billion ₦ 49.950 billion ₦ 228.390 billion
Range of bids: 11.0000% – 11.8000% 12.5000% – 13.1000% 12.8500% – 13.9800%
Stop Rates 11.8000% 12.9800% 13.0400%

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates rose day-on-day to 16.00% and 17.25% from 10.17% and 11.17%. 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 -11bps day-on-day. The February 2028 maturity traded the most to close at 14.25% from 14.38%.

Eurobonds

Investors showed continued interest in the nation’s Eurobonds market today, with average yield shedding ca -7bps day-on-day, particularly the November 2025 maturity which shed ca -13bps day-on-day.

Equities
The Nigerian equities market declined for a 6th consecutive trading day today, with the Nigerian Stock Exchange All Share Index (NSE ASI) losing ca -0.50% day-on-day to close at 30,885.31pts, with market’s year-to-date returns at -1.73%. This was largely on the back of price decline in Seplat Petroleum Development Company Plc (-5.43%), Guaranty Trust Bank Plc (-1.77%) and Stanbic IBTC Holding Plc (-1.10%).

The NSE Banking and Oil & Gas indices lost ca -35bps and -328bps respectively, while the NSE Consumer Goods and Industrial indices gained ca +13bps and +118bps respectively. Access Bank Plc led the volume chart with 93.47m while Zenith Bank topped the value charts with ₦678.71mn.

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, while appreciating against the Pound sterling and Euro at ₦406/€1 and ₦473/₤1 from ₦408/€1 and ₦473/₤1, respectively. The Naira appreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦359.95/$1 from ₦360.10/$1.

Crude oil prices dropped today with resistance near 2019 high levels, as investors booked in profit on gains over the last 3 trading days. Brent crude oil price dropped ca -0.74% at $67.99pb, while WTI shed ca -0.13% at $60.15pb, as at report time. Spot gold dipped ca -0.21% to $1,309.41 per ounce having earlier touched a 3 week high of $1,320.22.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
SOVRENINS 0.2 0.02 +10.00%
IKEJAHOTEL 1.56 0.15 +9.62%
AIICO 0.65 0.06 +9.23%
MBENEFIT 0.22 0.02 +9.09%
ETERNA 4.4 0.40 +9.09%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
CHAMPION 1.55 -0.15 -9.68%
ABCTRANS 0.54 -0.05 -9.26%
CHIPLC 0.29 -0.02 -6.90%
ROYALEX 0.31 -0.02 -6.45%
SEPLAT 581.60 -31.60 -5.43%
Benchmark T-Bills Discount Rates
21-Mar-19 20-Mar-19 Change in Rates
77Days                                      . 12.19% 12.15% 0.04%
168Days 13.23% 13.02% 0.21%
343Days. 12.78% 12.57% 0.21%
Source: FMDQ DQL for 21 March 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
21-Mar-19 20-Mar-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 14.67% 14.73% -0.06%
5 yrs: 15.54% 27-Apr 2023 14.46% 14.46% 0.00%
10 yrs: 16.29% 17 Mar 2027 14.40% 14.40% 0.00%
20 yrs: 16.25% 18-Apr 2037  . 14.12% 14.12% 0.00%
Source: FMDQ DQL for 21 March 2019
Benchmark FGN EuroBond Yields
21-Mar-19 20-Mar-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.80% 4.84% -0.04%
5 yrs: NGERIA 6 3/8 07/12/23 5.28% 5.37% -0.09%
10 yrs: NGERIA 6 1/2 11/28/27 6.54% 6.63% -0.09%
20 yrs: NGERIA 7.696 02/23/38 7.63% 7.70% -0.07%
30 yrs: NGERIA 9.248 01/21/49 8.12% 8.16% -0.04%
Source: FMDQ DQL for 21 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-19 133 11.45% 11.95%
17-Oct-19 210 12.55% 13.53%
07-Nov-19 231 12.55% 13.63%
16-Jan-20 301 12.40% 13.81%

 

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 67.99 (-0.74% d/d)
External Reserve (US$’billion) 43.50 (+0.89% ytd)
GDP % (Q4 2018) +2.38% (Q3 2018: +1.81% y/y)
NSE All Share Index (ASI) 30,885.31 (-0.50% d/d; -1.73% ytd)
Market Capitalisation (₦’Trillion) 11.52

Financial Markets Update – 21 March 2019

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