Financial Markets Today

Financial Markets Today

Global financial markets closed the last trading day of the week on a volatile note, of the back of better-than-expected economic data from the U.S. and significant decline in global crude oil prices. Yields on government treasuries declined today, on increased interest for safe-haven risk-assets as investors remained cautious of global growth figures in 2019 in the world’s largest economy, with the 10yr U.S. treasury dropping to ca +2.502%, despite data from the U.S. Bureau of Economic Analysis released today, showing a GDP growth +3.5% in Q1 2019, its strongest first quarter growth since 2015 vs analyst expectation of 2.5%, with the growth largely attributed to a decline in imports and comes of the back of 2nd lowest quarter growth for consumer spending in the last 5years, which further deepened fears of a deceleration in domestic consumer spending in the U.S.

 

We expect continued volatility in the global financial market in the near term, as investors continue to evaluate the economic growth data from the world’s largest economies, and on expectations for the U.S. Federal Reserve Bank to hold its benchmark interest rate unchanged at 2.25% – 2.50% at its next meeting on 01 May 2019.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Banking system liquidity opened positive today at ca ₦471.8bn from ca ₦237bn yesterday. The was no Open Market Operation (OMO) auction by the Central Bank of Nigeria (CBN) today. However, there was funding for Retail FX interventions and the Bonds primary market auction (PMA).

Treasury Bills
The treasury bills secondary market halted its previous bullish trend today, despite high banking system liquidity, as banks funded for retail FX interventions and the Bonds auction. Average yields closed lower day-on-day shedding ca -1bps with the 09 January 2020 maturity closing at 12.78%.

 

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates traded higher day-on-day at 16.43% and 17.29% from 6.14% and 7.29%. 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 8.00% for 30 – 60 days tenor on ₦10mln – ₦100mln.

Bonds
The bonds secondary market ended the week on a bearish note today, with very low volumes traded and average yields gaining ca +4bps day-on-day. The February 2028 maturity traded the most to close at 14.53% from 14.46%.

Eurobonds

The Eurobonds market saw some buy interest, as investors took advantage of the rise in yields of the previous 2 trading sessions. Average yields shed -10bps day-on-day with the January 2049 maturity closing at 8.42% from 8.52%.

Equities
The Nigerian equities market closed negative today, with the Nigerian Stock Exchange All Share Index (NSE ASI) shedding ca -0.60% day-on-day to close at 29,740.41pts, and market’s year-to-date returns at -5.38%. This was mainly due to losses in Guaranty Trust Bank Plc (-0.87%), Dangote Cement Plc (-0.59%), and Nigeria Brewery Plc (-0.54%).

The NSE Banking, Consumer Goods and Industrial indices lost ca -70bps, -33bps and -24bps respectively, while the NSE Oil & Gas index gained ca +189bps. Japaul Oil Plc led the volume chart with 56.56m units while Zenith Bank Plc led the value charts with ca ₦241.20mn.

The Naira traded flat against the dollar in both the interbank and parallel markets today at ₦306.90/$1 and ₦360/$1 respectively. It remained stable against the Pound sterling and the Euro at ₦474/₤1 and ₦403/€1 respectively in the parallel market. In the Nigerian Autonomous Foreign Exchange (NAFEX) window, the Naira depreciated against the Dollar to close at ₦360.41/$1 from ₦360.33/$1.

Oil prices crashed today, shedding as much as 4%, after the U.S. President, Donald Trump tweeted that he had informed the Organisation of Petroleum Exporting Countries (OPEC) to take action to reduce crude oil prices. Brent crude oil price shed ca -3.63% day-on-day at $71.66pb, while WTI shed ca -3.56% day-on-day at $62.89pb, as at report time. Spot gold gained ca +0.63% to close at $1,287.70 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
DANGFLOUR 15.55 1.40 +9.89%
NEIMETH 0.67 0.06 +9.84%
CUTIX 2.05 0.18 +9.63%
FO 29.20 2.50 +9.36%
OANDO 5.30 0.45 +9.28%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
OKOMUOIL 72.00 -8.00 -10.00%
UNIONDICON 12.15 -1.30 -9.67%
PREMPAINTS 9.40 -1.00 -9.62%
ABCTRANS 0.30 -0.03 -9.09%
PRESTIGE 0.50 -0.05 -9.07%
Benchmark T-Bills Discount Rates
26-Apr-19 25-Apr-19 Change in Rates
55Days                                      . 10.82% 10.97% -0.15%
146Days- 12.76% 12.84% -0.08%
342Days. 12.68% 12.61% 0.07%
Source: FMDQ DQL for 26 April 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
26-Apr-19 25-Apr-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 14.83% 14.81% 0.02%
5 yrs: 15.54% 27-Apr 2023 14.60% 14.37% 0.23%
10 yrs: 13.98% 17 Mar 2027 14.53% 14.46% 0.07%
20 yrs: 16.25% 18-Apr 2037  . 14.50% 14.54% -0.04%
Source: FMDQ DQL for 26 April 2019
Benchmark FGN EuroBond Yields
26-Apr-19 25-Apr-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.92% 5.01% -0.09%
5 yrs: NGERIA 6 3/8 07/12/23 5.56% 5.64% -0.08%
10 yrs: NGERIA 6 1/2 11/28/27 6.76% 6.87% -0.11%
20 yrs: NGERIA 7.696 02/23/38 7.82% 7.93% -0.11%
30 yrs: NGERIA 9.248 01/21/49 8.42% 8.52% -0.10%
Source: FMDQ DQL for 26 April 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.10% 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 97 10.10% 10.38%
17-Oct-19 174 12.20% 12.95%
07-Nov-19 195 12.30% 13.17%
16-Jan-20 265 12.35% 13.57%

 

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 71.66(-3.63% d/d)
External Reserve (US$’billion) 44.736 (+2.27% ytd)
GDP % (Q4 2018) +2.38% (Q3 2018: +1.81% y/y)
NSE All Share Index (ASI) 29,919.44 (+0.07% d/d; -4.81% ytd)
Market Capitalisation (₦’Trillion) 11.24

Financial Markets Update – 26 April 2019

Important Disclaimers
This document has been issued and approved by AIICO Capital and is based on information from various sources that we believe are reliable. However, no representation is made that it is accurate or complete. While reasonable care has been taken in preparing this document, no responsibility or liability is accepted for errors or fact or for any opinion expressed herein. This document is for information purposes only. It does not constitute any offer or solicitation to any person to enter into any trading transaction.
Investments discussed in this report may not be suitable for all investors. This report is provided solely for the information of AIICO Capital clients who are then expected to make their own investment decisions. AIICO Capital conducts designated investment business with market counter parties and customers and this document is directed only to such persons. AIICO Capital accepts no liability whatsoever for any direct or consequential loss arising from any use of this report or its contents. This report is for private circulation only and may not be reproduced, distributed or published by any recipient for any purpose without prior express consent of AIICO Capital. Users of this report should bear in mind that investments can fluctuate in price and value. Past performance is not necessarily a guide to future performance.
AIICO Capital is regulated by the Securities and Exchange Commission, and is licensed to provide fund and portfolio management services in Nigeria.