Financial Markets Today

Financial Markets Today

Global crude oil prices declined to their lowest levels in 3months today, with Brent crude oil price trading at ca $66 per barrel. This comes after the U.S. President – Donald Trump indicated the U.S. was set to impose new trade tariffs of 5% on imports from Mexico, effective 10 June, further escalating an already heightened global trade tension environment and further raising investors’ fears of a bigger slowdown in global economic growth in 2019. This also comes as weekly U.S. shale output rose to their highest levels in history at ca 12.3 million barrels per day with Shale stock pile only falling ca 300,000 barrels week-on-week vs market analysts’ expectation of a drop of ca 900,000 barrels.

We expect global crude oil prices to remain very volatile in the near term, with Brent crude oil price under pressure and possibly trading at a lower range of ca $60 – $68 per barrel, on continued rising fears of the negative impact global trade tensions on global economic growth in 2019.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Banking system liquidity opened positive today at ca ₦292.7bn higher than ca ₦155.9bn recorded on Tuesday, boosted by OMO maturities of ₦133bn and Primary market maturity of ca ₦67.3bn which was promptly rolled over. The Central Bank of Nigeria (CBN) did not conduct an Open Market Operation (OMO) auction today.

Treasury Bills
A relatively quiet session in the treasury bills secondary market today, as market focus shifted to the Primary Market Auction (PMA). Average rates marginally shed ca -6bps day-on-day, with the 29 August 2019 maturity trading the most to close at 10.34% from 10.80%. Please find below PMA result:

Tenor 91-Days 182-Days 364-Days
Maturity Date: 29-Aug-19 28-Nov-19 28-May-20
Amount Offered: ₦24.372 billion ₦23.157 billion ₦19.842 billion
Subscription ₦24.447 billion ₦51.233 billion ₦119.850 billion
Amount Allotted: ₦24.372 billion ₦23.157 billion ₦19.842 billion
Range of bids 9.5000% – 10.2000% 11.40000% – 12.6640% 11.7900% – 14.0000%
Stop Rate 10.0000% 11.9500% 12.2000%

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates traded lower day-on-day at 5.86% and 6.50% from 12.00% and 13.43%, with improved interbank liquidity. 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 quiet day in the bonds secondary market today, very few transactions across the curve and profit taking on select papers. Average yields marginally gained ca +1bps day-on-day, with April 2023 maturity closing at 14.33% from 14.29%.

Eurobonds

Mixed sentiments in the nation’s Eurobonds market today, with sell offs at the long-end of the curve and some demand on the short-to-mid dated papers. Average yields rose ca +3bps day-on-day with the January 2049 maturity closing at 8.73% from 8.70%.

Equities

The Nigerian equities market closed negative today, with the Nigerian Stock Exchange All Share Index (NSE ASI) shedding ca -0.17% day-on-day to close at 31,254.19pts, with the market’s year-to-date returns at -0.56%. This was largely due to losses in Guaranty Trust Bank Plc (-3.03%), Zenith Bank Plc (-1.91%) and Dangote Cement Plc (-0.89%).

The NSE Banking, Consumer goods, Industrial and Oil & Gas all lost ca -193bps, -58bps, -4bps and -32bps respectively. Union Diagnostics & Clinical Services Plc led the volume chart with 43.36m and MTN Nigeria Plc led the value chart with ca ₦2.86bn.

The Naira remained flat against the dollar in both the interbank and parallel markets at ₦306.90/$1 and ₦361/$1 respectively. It appreciated against the Euro at ₦401/€1 from ₦403/€1 but was stable against the Pound sterling at ₦465/₤1, in the parallel market. The FMDQ Nigerian Autonomous Foreign Exchange (NAFEX) Fixing rate depreciated day-on-day at ₦360.47/$1 from ₦360.39/$1.

Crude oil prices declined today, as data released by the Energy Information Administration (EIA) showed U.S. weekly crude oil stockpile fell 300,000 barrels, lower than expected ca 900,000 barrels expected by market analysts, thus prompting worries about excess supply. Brent crude oil price shed ca -1.93% day-on-day at $68.11pb, while WTI shed ca -1.07% day-on-day at $58.18pb, as at report time. Spot gold gained ca +0.4509% at $1,292.10 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
LIVESTOCK 0.59 0.05 +9.26%
LAWUNION 0.48 0.04 +9.09%
STERLNBANK 2.25 0.18 +8.70%
NAHCO 3.40 0.22 +6.92%
WEMABANK 0.66 0.04 +6.45%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
JAPAULOIL 0.29 -0.03 -10.00%
BERGER 6.65 -0.70 -9.52%
UNILEVER 31.00 -2.70 -8.01%
SOVRENINS 0.20 -0.02 -8.00%
ETI 0.21 -0.95 -7.85%
Benchmark T-Bills Discount Rates
30-May-19 28-May-19 Change in Rates
90 Days 10.34% 10.80% -0.46%
175 Days 11.34% 11.46% -0.12%
336 Days. 11.55% 11.55% 0.00%
Source: FMDQ DQL for 30 May 2019
Benchmark FGN Bond Yields
30-May-19 28-May-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 14.71% 14.43% 0.28%
5 yrs: 15.54% 27-Apr 2023 14.33% 14.29% 0.04%
10 yrs: 13.98% 23 Feb 2028 14.37% 14.37% 0.00%
20 yrs: 16.25% 18-Apr 2037  . 14.45% 14.45% 0.00%
Source: FMDQ DQL for 30 May 2019
Benchmark FGN EuroBond Yields
30-May-19 28-May-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.71% 4.85% -0.01%
5 yrs: NGERIA 6 3/8 07/12/23 5.57% 5.58% -0.01%
10 yrs: NGERIA 6 1/2 11/28/27 7.19% 7.14% 0.05%
20 yrs: NGERIA 7.696 02/23/38 8.19% 8.14% 0.05%
30 yrs: NGERIA 9.248 01/21/49 8.73% 8.70% 0.03%
Source: FMDQ DQL for 30 May 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.23% 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 63 9.25% 9.40%
17-Oct-19 140 11.35% 11.87%
07-Nov-19 161 11.35% 11.95%
16-Jan-20 231 11.45% 12.34%
Select Macro-economic Indices
Inflation % (April 2019) 11.37 (+1.07% ytd)
PMI (May 2019) 57.80
MPR (%) 13.5 (-5%/+2% around mid-point)
CRR (%) 22.5
Brent Crude Price US$ pbbl 68.11 (-1.93% d/d)
External Reserve (US$’billion) 45.087 (+2.04% ytd)
GDP % (Q4 2018) +2.01% (Q4 2018: +2.38% y/y)
NSE All Share Index (ASI) 31,254.19 (-0.17% d/d; -0.56% ytd)
Market Capitalisation (₦’Trillion) 13.77

Financial Markets Update – 31 MAY 2019

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