Financial Markets Today

Financial Markets Today

U.S. financial markets traded mixed today, with equity benchmark indices moving in mixed direction while yields on benchmark treasuries marginally declined day-on-day, on investors’ mixed of the potential outcomes of the Federal Open Market Committee (FOMC) meeting of the U.S. Federal Reserve Bank and continued uncertainties of global trade tensions. While the Dow Jones Industrial Average (DJIA) gained ca +0.12%, both the S & P 500 and NASDAQ declined by ca -0.21% and -0.53% respectively. With yields on 2yr, 10yr and 30yr U.S. Treasuries which move inversely to price, marginally declined to ca +1.86%, +2.07% and +2.59% respectively.

We expect continued mute and cautious trading by investors till the release of the outcome of the meeting of the Federal Open Market Committee (FOMC) of the U.S. Federal Reserve Bank scheduled on Wednesday, with rising expectation for the FOMC to cut its benchmark by ca 25bps, from current 2.25% – 2.50% to 2.00% and 2.5%.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

The amount of money in the Nigerian banking system opened on a negative note today, at ca -₦142.97bn from the positive position it closed at the previous week at ca ₦4.13bn. The Central Bank of Nigeria (CBN) did not conduct an Open Market Operation (OMO) auction today.

Treasury Bills
The treasury bills secondary market kicked off the first trading day on a bearish note, with sell offs seen on the long end of the curve, Average rates gained ca +12bps day-on-day as the 11 June 2020 maturity closed at 11.58% from 11.10%.

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates traded lower day-on-day to open the week at 13.14% and 14.29% from 21.86% and 23.21% respectively, of the back of inflows from Statutory Revenue Allocation (SRA) and Bonds coupon payments. 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
Federal Government (FGN) bonds in the domestic secondary market opened the week on a mixed note today, with some demand seen at the long end of the curve, as the April 2049 closed at 14.03% from 14.12%, and some profit taking was also seen at the mid end of the curve with the February 2028 closing at 13.87% from 13.59%. Average yields marginally gained +1bps day on day.

Eurobond

Sell-offs and bearish sentiments continued in the Eurobond space for the 3rd consecutive day with sell-offs seen, particularly on the November 2027 and January 2049 maturities which closed the day at 6.10% and 7.92% from 6.05% and 7.87% respectively. Average yields gained ca +4bps day-on-day.

Equities
The Nigerian equities market opened the first trading day of the week on a bullish note today, with the Nigerian Stock Exchange All Share Index (NSE ASI) gaining ca +0.11% day-on-day to close at 27,950.36pts, and market’s year-to-date returns further dropping to -11.07%. This was mainly due to gains in Guaranty Trust Bank Plc (+0.88%), Nestle Plc (+0.77%) and Stanbic Bank Plc (+0.13%).

The NSE Consumer and Industrial indices gained ca +39bps and +20bps while the NSE Banking and Oil & Gas indices lost ca -2bps and -125bps respectively. Zenith Bank Plc led the volume chart with ca 11.26m units and while Nestle Plc led the value chart with ca ₦230.18mn worth of trade.

The Naira appreciated against the dollar day-on-day in the interbank market to close at ₦306.85/$1 from ₦306.90/$1 while in the parallel markets it remained stable to close at ₦360/$1 respectively. In the parallel market, it traded flat against the Pound Sterling and the Euro appreciated day-on-day closing at ₦455/₤1 and ₦402/€1 from ₦403/€1 respectively. The FMDQ Nigerian Autonomous Foreign Exchange (NAFEX) Fixing rate marginally depreciated day-on-day at ₦361.63/$1 from ₦361.56/$1.

Crude oil price gained today on the back of rising expectation of interest rate cut by the U.S. Federal Reserve Bank and announced re-commencement of negotiation meeting between U.S./China Trade. Brent crude oil price gained ca +0.41% day-on-day at $63.72pb, while WTI gained ca +1.26% day-on-day at $56.91pb, as at report time. Spot gold gains ca +0.162% at $1,421.50 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
CILEASING 5.50 0.5 +10.00%
VITAFOAM 4.09 0.37 +9.95%
JAPAULOIL 0.23 0.02 +9.52%
DANGFLOUR 19.60 1.65 +9.19%
MCNICHOLS 0.49 0.04 +8.89%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
TOTAL 114.8 -12.70 -9.96%
CHAMS 0.26 -0.02 -7.14%
ETI 8.00 -0.45 -5.33%
UAC-PROP 1.13 -0.06 -5.04%
MBENEFIT 0.2 -0.01 -4.76%
Benchmark T-Bills Discount Rates
29-Jul-19 26-Jul-19 Change in Rates
87 Days 10.73% 10.40% 0.33%
178 Days 10.82% 10.82% 0.0%
318 Days 11.58% 11.10% 0.48%
Source: FMDQ DQL for 29 July 2019
Benchmark FGN Bond Yields
29-Jul-19 26-Jul-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021
12.99%
13.00% -0.01%
5 yrs: 15.54% 27-Apr 2023 13.01% 13.01% -0.0%
10 yrs: 13.98% 23-Feb 2028 13.87% 13.59% 0.28%
20 yrs: 16.25% 18-Apr 2037 13.78% 14.08% -0.3%
30 yrs: 14.80% 26-Apr 2049 14.03% 14.12% -0.09%
Source: FMDQ DQL for 29 July 2019
Benchmark FGN EuroBond Yields
29-Jul-19 26-Jul-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.01% 3.96% 0.05%
5 yrs: NGERIA 6 3/8 07/12/23 4.55% 4.52% 0.03%
10 yrs: NGERIA 6 1/2 11/28/27 6.1% 6.05% 0.05%
20 yrs: NGERIA 7.696 02/23/38 7.35% 7.31% 0.04%
30 yrs: NGERIA 9.248 01/21/49 7.92% 7.87% 0.05%
Source: FMDQ DQL for 29 July 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 12.84% 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 59 9.75% 9.91%
31-Oct-19 94 9.60% 9.84%
16-Jan-20 171 10.35% 10.88%
28-May-20 304 10.25% 11.21%
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 63.37 (+0.41% d/d)
External Reserve (US$’billion) 45.043 (+1.36% ytd)
GDP % (Q1 2019) +2.01% (Q4 2018: +2.38% y/y)
NSE All Share Index (ASI) 27,950.36 (+0.11% d/d; -11.07 ytd)
Market Capitalisation (₦’Trillion) 13.62

Financial Markets Update – 26 JULY 2019

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