Financial Markets Today

Financial Markets Today

Global crude oil prices rallied to their highest levels in 1 month, with Brent crude price trading at ca $66.54 per barrel on continued escalation of U.S./Iran tensions and significant decline in U.S. Shale stockpile. Data released by the Energy Information Administration (EIA) today showed a significantly large decline in U.S. shale stockpile of ca 12.8 million barrels last week, its largest 1-weekl drop since September 2016, as the U.S. government announced further sanctions on Iran, further supporting the rise in crude oil price.

With increasing expectation of further escalation of U.S./Iran tensions and implementation of new sanctions by the U.S. government, we expect further rise in Brent crude oil price in the short term as the Organisation of Petroleum Exporting Countries (OPEC) is expected to maintain current production-cut deal through Q3 2019, at its meeting next week Monday.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Banking system liquidity was expected to open positive today with no major funding requirement by the Banks. The Central Bank of Nigeria (CBN) did not conduct an Open Market Operation (OMO) auction today.

Treasury Bills
Buoyed by positive interbank liquidity, the treasury bills secondary market continued on a bullish note today, with demand on mid-to-long dated maturities. In the absence on an OMO auction by the CBN, average yields shed ca -3bps day-on-day with the 23 April 2020 maturity closing at 11.76% from 12.00%.

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates traded lower day-on-day at 5.50% and 6.07% from 7.50% and 8.21%. 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
A relatively quiet session in the bonds secondary market today, with few activities on select maturities as focus shifted to the Primary Market Auction (PMA). Average yields marginally inched up, gaining +3bps day-on-day with the February 2028 paper closing at 14.53% from 14.49%. Please find below results from today’s primary market auction:

S/N AUCTION DATE MATURITY DATE AMOUNT OFFERED

(NGN)

AMOUNT ALLOTED MARGINAL RATE
1 26-June-19 27-Apr-23 ₦30.00 billion  ₦28.993 billion 14.3000%
2 26-June-19 26-Apr-29 ₦40.00 billion  ₦36.358 billion 14.5000%
3 26-June-19 26-Apr-49 ₦30.00 billion  ₦31.486 billion 14.6800%

Eurobonds

A relatively quiet day in the nation’s Eurobonds market today, with no clear direction as market players traded cautiously. Average yields remained flat day-on-day, with the 2049 paper closing at 8.23%.

Equities
The Nigerian equities market continued on a negative note today, with the Nigerian Stock Exchange All Share Index (NSE ASI) marginally shedding ca -0.20% day-on-day to close at 29,609.00pts, and market’s year-to-date returns at -5.80%. This was due to losses Nestle Nigeria Plc (-3.52%) and MTN Nigeria Plc (-0.39%).

The NSE Banking and Oil & Gas indices gained ca +28bps and +91bps respectively, while the NSE Industrial and Consumer goods indices lost ca -188bps and -35bps. Wema Bank Plc led the volume chart with ca 194mn units and Unilever Nigeria Plc led the value chart with ca ₦643mn worth of trades.

The Naira remained flat against the dollar in the interbank and parallel markets at ₦306.90/$1 and ₦362/$1 respectively. It also remained unchanged in the parallel market against the Pound sterling and the Euro at ₦463/₤1 and ₦407/€1 respectively. The FMDQ Nigerian Autonomous Foreign Exchange (NAFEX) Fixing rate appreciated day-on-day at ₦360.49/$1 from ₦360.72/$1.

Crude oil prices rose today, after data released by the Energy Information Administration (EIA) showed that U.S crude stockpiles dropped by 12.8million barrels, its biggest drop since September 2016. Brent crude oil price gained ca +2.29% day-on-day at $66.54pb, while WTI gained ca +3.08% day-on-day at $59.59pb, as at report time. Spot gold fell -0.134% at $1,416.80 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
COURTVILLE 0.23 0.02 +9.52%
CHIPLC 0.24 0.02 +9.09%
LINKASSURE 0.71 0.05 +7.58%
NB 62.00 4.00 +6.90%
BERGER 7.15 0.45 +4.44%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
CHAMS 0.27 -0.03 -10.00%
BETAGLAS 66.35 -7.35 -9.97%
CCNN 12.00 -1.30 -9.77%
PRESTIGE 0.50 -0.04 -7.41%
UNITYBNK 0.64 -0.05 -7.25%
Benchmark T-Bills Discount Rates
26-June-19 25-June-19 Change in Rates
86 Days                                      . 10.85% 10.87% -0.02%
176 Days- 11.66% 11.81% -0.15%
351 Days. 11.70% 11.70% 0.00%
Source: FMDQ DQL for 26 June 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
26-June-19 25-June-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 14.31% 14.02% 0.29%
5 yrs: 15.54% 27-Apr 2023 14.23% 14.23% 0.00%
10 yrs: 13.98% 17 Mar 2027 14.53% 14.49% 0.04%
20 yrs: 16.25% 18-Apr 2037  . 14.52% 14.52% 0.00%
Source: FMDQ DQL for 26 June 2019
Benchmark FGN EuroBond Yields
26-June-19 25-June-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.16% 4.16% 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 6.73% 6.72% 0.01%
20 yrs: NGERIA 7.696 02/23/38 7.71% 7.70% 0.01%
30 yrs: NGERIA 9.248 01/21/49 8.23% 8.23% 0.00%
Source: FMDQ DQL for 26 June 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.29% 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 64 10.60% 10.80%
17-Oct-19 113 11.00% 11.39%
07-Nov-19 134 11.20% 11.68%
16-Jan-20 204 11.60% 12.40%
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 66.54 (+2.29% d/d)
External Reserve (US$’billion) 45.089 (+1.41% ytd)
GDP % (Q4 2018) +2.01% (Q4 2018: +2.38% y/y)
NSE All Share Index (ASI) 29,609.00 (-0.20% d/d; -5.80% ytd)
Market Capitalisation (₦’Trillion) 13.05

Financial Markets Update – 26 JUNE 2019

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