Financial Markets Today

Financial Markets Today

The Governor of Nigeria’s Central Bank (CBN) – Mr. Godwin Emefiele indicated today, that the Apex bank will sustain its current managed float FX exchange system, as the key focus of its exchange rate policy over the next 5years. This came at the presentation of the 5year plan by the CBN Governor today, and comes as the nation’s foreign reserve levels dropped ca $100m in 1 week to ca $45.086 billion. He also indicated other 4 focus points for the Apex bank over the next 5 years, including supporting economic growth and macro-economic stability, financial system stability including re-capitalisation of the Nigerian banking system, growth in external reserves and economic diversification.

We do not expect any significant changes to the current FX policies of the Central Bank (CBN), with the Apex bank expected to maintain its current multiple exchange rate system, through 2019. We expect rising expectation of possible rate cuts by global Central Banks in the second half of 2019 to spur growth in their respective economies, to keep the CBN’s monetary policies dovish in the near term, in support of economic growth in Nigeria.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Banking system liquidity was expected to open positive today, with Banks’ having to make provisions for Wholesale FX interventions. The Central Bank of Nigeria (CBN) did not conduct an Open Market Operation (OMO) auction today due to the primary market auction.

Treasury Bills
The treasury bills secondary market kicked off the week on a bullish note today, with some demand on the short-to-mid dated maturities, buoyed by interbank liquidity and lack of OMO auction by the CBN. Average yields dropped ca -9bps day-on-day with the 17 October 2019 maturity trading the most to close at 11.61% from 11.92%.

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates traded higher day-on-day at 9.86% and 10.43% from 8.71% and 9.21%. 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 7.00% for 30 – 60 days tenor on ₦10mln – ₦100mln.

Bonds
The bonds secondary market kicked off the week on a mixed note today, with sell-offs on the short end and demand on the mid-to-long end of the curve. Average yields trended upwards gaining ca +3bps day-on-day, with the July 2021 paper closing at 14.66% from 14.52%.


Eurobond

The nation’s Eurobonds market kicked off the week on a rather quiet note, with trickles of demand on most of the maturities. Average yields trended downwards, marginally shedding ca -1bps day-on-day, with the 2049 paper closing at 8.18% from 8.19%.

Equities
The Nigerian equities market closed negative today, with the Nigerian Stock Exchange All Share Index (NSE ASI) marginally shedding ca -0.14% day-on-day to close at 29,809.20pts, and market’s year-to-date returns at -5.16%. This was mainly due to a loss in Guaranty Trust Bank Plc (-0.48%).

The NSE Oil & Gas and Consumer goods indices gained ca +39bps and +113bps respectively, while the NSE Industrial and Banking indices lost ca -124bps and -142bps. Zenith Bank Plc led both the volume and value charts with ca 355.21m units traded at ca ₦7.10bn 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 at ₦463/₤1 but marginally depreciated against the Euro at ₦406/€1 from ₦405/€1. The FMDQ Nigerian Autonomous Foreign Exchange (NAFEX) Fixing rate appreciated day-on-day at ₦360.43/$1 from ₦360.50/$1.

Crude oil prices dropped today, after prices recovered from the news of heightened tensions between U.S and Iran. Brent crude oil price shed ca -1.27% day-on-day at $64.37pb, while WTI shed ca -0.47% day-on-day at $57.16pb, as at report time. Spot gold also gained ca +1.3428% at $1,418.90 per ounce, reaching new highs last seen since August 2013.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
CHAMPION 1.56 0.14 +9.86%
GLAXOSMITH 10.25 0.90 +9.63%
PRESTIGE 0.59 0.05 +9.26%
LASACO 0.31 0.02 +6.90%
MBENEFIT 0.21 0.01 +5.00%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
CCNN 12.15 -1.35 -10.00%
NEM 2.52 -0.28 -10.00%
ETI 10.25 -1.10 -9.69%
NPFMCRFBK 1.20 -0.10 -7.69%
DANGSUGAR 11.45 -0.95 -7.66%
Benchmark T-Bills Discount Rates
  24-Jun-19 21-Jun-19 Change in Rates
87 Days                                      . 10.70% 10.87% -0.17%  
174 Days 11.81% 11.93% -0.12%  
353 Days 12.01% 12.01% 0.00%  
Source: FMDQ DQL for 24 June 2019
Benchmark FGN Bond Yields
  24-Jun-19 21-Jun-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 14.66% 14.52% 0.14%  
5 yrs: 15.54% 27-Apr 2023 14.52% 14.34% 0.00%  
10 yrs: 13.98% 23 Feb 2028 14.49% 14.50% -0.01%  
20 yrs: 16.25% 18-Apr 2037  . 14.50% 14.77% -0.27%  
Source: FMDQ DQL for 24 June 2019
Benchmark FGN EuroBond Yields
  24-Jun-19 21-Jun-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.14% 4.14% 0.00%  
5 yrs: NGERIA 6 3/8 07/12/23 5.03% 5.04% -0.01%  
10 yrs: NGERIA 6 1/2 11/28/27 6.69% 6.71% -0.02%  
20 yrs: NGERIA 7.696 02/23/38 7.64% 7.66% -0.02%  
30 yrs: NGERIA 9.248 01/21/49 8.18% 8.19% -0.01%  
Source: FMDQ DQL for 24 June 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.25% 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
29-Aug-19 66 10.65% 10.86%
17-Oct-19 115 11.65% 12.09%
07-Nov-19 136 11.45% 11.96%
16-Jan-20 206 11.75% 12.58%
Select Macro-economic Indices
Inflation % (May 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 64.37(-1.27% d/d)
External Reserve (US$’billion) 45.087 (+1.41% ytd)
GDP % (Q1 2019) +2.01% (Q4 2018: +2.38% y/y)
NSE All Share Index (ASI) 29,809.20 (-0.14% d/d; -5.16% ytd)
Market Capitalisation (₦’Trillion) 13.14

Financial Markets Update – 24 JUNE 2019

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