Financial Markets Today

Financial Markets Today

Global equities market declined today with the Dow Jones Industrial Average (DJIA), S&P 500, NASDAQ, German DAX, UK FTSE and French CAC all lost ca -0.21%, -0.35%, -0.31%, -2.18%, -0.52%, -1.61% day-on-day. This comes of the back of increased uncertainties of current restarted U.S./China trade negotiations with comments by the U.S. President – Donald Trump expressing reservations of the trade negotiations. This also comes as the Federal Open Market Committee (FOMC) of the U.S. Federal Reserve Bank (Fed) commenced it’s 2-day monetary policy meeting today, with high expectations by market analysts’ of a minimum 25bps rate cut to the Fed’s benchmark interest rate.

With the Fed’s documented concerns of the negative impact of current global trade tensions and expectations for a significant slowdown in global economic growth in 2019, continued mute inflation in the U.S. and weaker GDP growth vs 2018, we expect members of the FOMC to maintain their previous dovish monetary policy stance at the conclusion of its meeting tomorrow. We also investors to remain cautious in early trading tomorrow, with key focus on the outcome of the FOMC meeting.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

The Nigerian interbank system opened the day on a positive note today, with the amount of money in the system rising to ca ₦293.01bn from its previous day’s negative opening of ca -₦142.97bn, boosted by inflows from Statutory Revenue Allocations (SRA) and coupon payment. The Central Bank of Nigeria (CBN) did not conduct an Open Market Operation (OMO) auction today.

Treasury Bills
The treasury bills secondary market closed the day on a bullish note, with demand seen across the curve, due to high positive banking system liquidity. Average rates dipped ca -13bps with buying interest seen at the mid-to-long end of the curve, as the 04 June 2020 maturity closed at 10.93% from 11.26%.

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates traded lower day-on-day to close the day at 4.57% and 5.21% from 13.14% and 14.29% respectively. 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 domestic bonds secondary market ended the day on a bullish note today, with some demand seen at the long-end of the curve. Average yields marginally dipped -2bps day-on-day, with the April 2037 maturity closing at 13.74% from 13.78%.

Eurobond

Bearish sentiments in the nation’s Eurobond space continued for the 4th consecutive day, with sell-offs seen across the curve, on possible rise in risk-off sentiments. Average yields gained ca +9bps day-on-day with most of market activity on the long end of the curve, with the January 2049 maturity closing at 8.03% from 7.92%.

Equities
The Nigerian equities market reversed previous day gains to close on a bearish note today, as the Nigerian Stock Exchange All Share Index (NSE ASI) lost ca -0.46% day-on-day to close at 27,820.57pts, and market’s year-to-date returns further dropping to -11.49%. This was mainly due to losses in Guaranty Trust Bank Plc (-0.70%), Nestle Nigeria Plc (-0.80%) and Stanbic IBTC Bank Plc (-0.13%).

The NSE Industrial index was the sole gainer with ca +57bps while the NSE Consumer, Banking and Oil & Gas indices lost ca -207bps, -72bps and -16bps respectively. Guaranty Trust Bank Plc led both the volume and value charts with ca 22.27m units and ca ₦640.11mn worth of trades respectively.

The Naira remained stable against the dollar day-on-day in the interbank market and in the parallel markets to close at ₦306.85/$1 and ₦360/$1 respectively. In the parallel market, it traded flat against the Pound Sterling day-on-day to close at ₦455/₤1, but depreciated against the Euro at ₦400/€1 from ₦402/€1 day-on-day. The FMDQ Nigerian Autonomous Foreign Exchange (NAFEX) Fixing rate marginally depreciated day-on-day at ₦361.68/$1 from ₦361.63/$1.

Crude oil price rose to a 2-week high today, on the back expectations of interest rate cut by the U.S. Federal Reserve Bank as well as a forecasted drop in U.S. crude inventory, for a 7th straight week. Brent crude oil price gained ca +1.24% day-on-day at $64.50pb, while WTI gained ca +1.44% day-on-day at $57.69pb, as at report time. Spot gold gained ca +0.70% at $1,430.40 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
MBENEFIT 0.22 0.02 +10.00%
IKEJAHOTEL 1.46 0.12 +8.96%
UNITYBNK 0.63 0.05 +8.62%
VITAFOAM 4.30 0.21 +5.13%
JBERGER 18.75 0.65 +3.59%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
JAPAULOIL 0.21 -0.02 -8.7%
NB 55.00 -5.00 -8.33%
LASACO 0.34 -0.03 -8.11%
WEMABANK 0.6 -0.02 -3.23%
TRANSCORP 0.96 -0.03 -3.03%
Benchmark T-Bills Discount Rates
30-Jul-19 29-Jul-19 Change in Rates
86 Days
10.61%
10.73% -0.12
177 Days
10.63%
10.82% -0.19
317 Days
10.91%
11.58% -0.67%
Source: FMDQ DQL for 30 July 2019
Benchmark FGN Bond Yields
30-Jul-19 29-Jul-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 12.35% 12.99% -0.64%
5 yrs: 15.54% 27-Apr 2023 13.01% 13.01% -0.0%
10 yrs: 13.98% 23-Feb 2028 13.64% 13.87% -0.23%
20 yrs: 16.25% 18-Apr 2037 13.74% 13.78% -0.04%
30 yrs: 14.80% 26-Apr 2049 14.00% 14.03% -0.03%
Source: FMDQ DQL for 30 July 2019
Benchmark FGN EuroBond Yields
30-Jul-19 29-Jul-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.09% 4.01% 0.08%
5 yrs: NGERIA 6 3/8 07/12/23 4.62% 4.55% 0.07%
10 yrs: NGERIA 6 1/2 11/28/27 6.19% 6.1% 0.09%
20 yrs: NGERIA 7.696 02/23/38 7.44% 7.35% 0.09%
30 yrs: NGERIA 9.248 01/21/49 8.03% 7.92% 0.11%
Source: FMDQ DQL for 30 July 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 12.81% 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
26-Sep-19 58 10.30% 10.47%
31-Oct-19 93 9.70% 9.95%
16-Jan-20 170 10.60% 11.15%
28-May-20 303 10.50% 11.50%
Select Macro-economic Indices
Inflation % (June2019) 11.22 (-0.18% ytd)
PMI (June 2019) 57.40
MPR (%) 13.5 (-5%/+2% around mid-point)
CRR (%) 22.5
Brent Crude Price US$ pbbl 64.50 (+1.24% d/d)
External Reserve (US$’billion) 44.943 (+1.33% ytd)
GDP % (Q1 2019) +2.01% (Q4 2018: +2.38% y/y)
NSE All Share Index (ASI) 27,820.57 (-0.46% d/d; -11.49 ytd)
Market Capitalisation (₦’Trillion) 13.56

Financial Markets Update – 30 JULY 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