Financial Markets Today

Financial Markets Today

The Nigerian Federal Government, through the Debt Management Office (DMO) today, successfully auctioned and issued its longest tenored domestic debt, the 30year April 2049 maturity, its first in the nation’s 59year history, with yield at the primary auction rising ca 100bps – 130bps from the last primary auction in March. Yields at the 5yr and 10yr tenors rose ca 100bps respectively from stop rates at last month’s auction, at 14.5% and 14.55% respectively while the new 30yr tenor closed at 14.8%, with ca 400% over-subscription and allotment of ca ₦53.16 billion vs ₦20 billion offered.

We expect the successful issuance of the new 30year tenored bond and unmet subscription from the auction to positively impact demand at the long end of the yield curve in the near term. We also expect this to further improve demand for longer tenored debt instruments, particularly from domestic institutional investors with long tenored liabilities to match – Insurance companies and Pension Fund Administrators (PFAs).

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Banking system liquidity opened positive today at ca ₦129bn from ca ₦193bn yesterday. The was no Open Market Operation (OMO) auction by the Central Bank of Nigeria (CBN) today.

Treasury Bills
The treasury bills secondary market traded bullish today, with demand concentrated on mid-to-long dated maturities. Average yields shed ca -2bps day-on-day with the 19 March 2020 maturity closing at 12.63% from 12.86%.

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates traded lower day-on-day at 11.86% and 12.86% from 17.29% and 18.21%. 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 bonds secondary market traded on a bullish note today, with demand seen across the curve especially on the mid-to-long dated maturities. Average yields shed ca -6bps day-on-day with the February 2028 maturity closing at 14.39% from 14.45%. The Debt Management Office (DMO) sold ca ₦97.4bn of the ₦100bn on offer at today’s Primary Market Auction (PMA). Please find below a summary of the results of the auction:

S/N AUCTION DATE MATURITY DATE AMOUNT OFFERED

(NGN)

AMOUNT ALLOTED (NGN) MARGINAL RATE
1 24-Apr-19 27-Apr-23 ₦40.00 billion ₦6.814 billion 14.5000%
2 24-Apr-19 26-Apr-29 ₦40.00 billion ₦37.430 billion 14.5500%
3 24-Apr-19 26-Apr-49 ₦20.00 billion ₦53.160 billion 14.8000%

Eurobonds

The Eurobonds market saw fewer transactions today with average yields marginally gaining ca +1bps day-on-day. The February 2038 and January 2049 papers both closed at 7.79% and 8.36% from 7.78% and 8.34% respectively.

Equities
The Nigerian equities market closed negative today, with the Nigerian Stock Exchange All Share Index (NSE ASI) depreciating by ca -0.59% day-on-day to close at 29,898.31pts, and market’s year-to-date returns at -4.87%. This was majorly on the back of losses in Seplat Petroleum Development Company (-4.39%) and Nestle Nigeria Plc (-1.90%).

The NSE Banking index gained ca +93bps, while the Oil & Gas, Industrial and Consumer Goods indices all lost ca -361bps, -70bps and -110bps respectively. Japaul Oil Plc led the volume chart with ca 92.30m units while Zenith Bank Plc led the value chart with ca ₦543.57mn worth of trades.

The Naira marginally appreciated against the dollar in the interbank market today at ₦306.90 from ₦306.95, while it remained flat in the parallel market at ₦360/$1. It remained stable against the Pound sterling at ₦474/₤1 and marginally appreciated against the Euro at ₦404/€1 from ₦405/€1 in the parallel market. In the Nigerian Autonomous Foreign Exchange (NAFEX) window, the Naira depreciated against the Dollar to close at ₦360.34/$1 from ₦360.23/$1.

Oil prices fell today but hovered around its six-month high after data from the Energy Information Administration (EIA) showed U.S. crude stockpiles rose 5.5 million barrels week-on-week. Brent crude oil price shed ca -0.16% day-on-day at $73.77pb, while WTI shed ca -0.77% day-on-day at $65.79pb, as at report time. Spot gold gained ca +0.44% to close at $1,278.80 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
DANGFLOUR 12.90 1.15 +9.79%
BOCGAS 4.16 0.37 +9.76%
FIDSON 4.55 0.40 +9.64%
JAPAULOIL 0.24 0.02 +9.05%
NEIMETH 0.61 0.05 +8.93%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
CONOIL 20.80 -2.20 -9.57%
INTBREW 21.00 -2.00 -8.70%
AGLEVENT 0.26 -0.02 -7.14%
OANDO 4.80 -0.03 -5.88%
SEPLAT 545.00 -25.00 -4.39%
Benchmark T-Bills Discount Rates
24-Apr-19 23-Apr-19 Change in Rates
57Days                                      . 11.11% 11.17% -0.06%
148Days- 12.74% 12.91% -0.17%
344Days. 12.72% 12.67% 0.05%
Source: FMDQ DQL for 24 April 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
24-Apr-19 23-Apr-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 14.80% 14.85% -0.05%
5 yrs: 15.54% 27-Apr 2023 14.40% 14.46% -0.06%
10 yrs: 13.98% 17 Mar 2027 14.39% 14.45% -0.06%
20 yrs: 16.25% 18-Apr 2037  . 14.38% 14.56% -0.16%
Source: FMDQ DQL for 24 April 2019
Benchmark FGN EuroBond Yields
24-Apr-19 23-Apr-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.89% 4.89% 0.00%
5 yrs: NGERIA 6 3/8 07/12/23 5.54% 5.53% 0.01%
10 yrs: NGERIA 6 1/2 11/28/27 6.72% 6.70% 0.02%
20 yrs: NGERIA 7.696 02/23/38 7.79% 7.78% 0.01%
30 yrs: NGERIA 9.248 01/21/49 8.36% 8.34% 0.02%
Source: FMDQ DQL for 24 April 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.07% 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 99 10.2% 10.49%
17-Oct-19 176 12.40% 13.19%
07-Nov-19 197 12.50% 13.40%
16-Jan-20 267 12.45% 13.70%
Select Macro-economic Indices
Inflation % (March 2019) 11.25 (-1.66% ytd)
PMI (March 2019) 57.40
MPR (%) 13.5 (-5%/+2% around mid-point)
CRR (%) 22.5
Brent Crude Price US$ pbbl 73.77(-0.16% d/d)
External Reserve (US$’billion) 44.736 (+2.26% ytd)
GDP % (Q4 2018) +2.38% (Q3 2018: +1.81% y/y)
NSE All Share Index (ASI) 29,898.31(-0.03% d/d; -4.87% ytd)
Market Capitalisation (₦’Trillion) 11.24

Financial Markets Update – 25 April 2019

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