Financial Markets Today

Financial Markets Today

Yields on U.S. treasury bonds rose to a 3week high today, after the release of the U.S. Q4 2018 GDP growth rate figure which showed a better-than-expected growth of +2.6% year-on-year (y/y) vs market analysts’ expectation of +2.4% y/y. This comes on the back of continued positive growth in personal consumption of +2.8%, non-residential investment of +6.2% and fixed investment growth of 3.9% in Q4 2018. Despite the quarter-on-quarter softening in economic growth, average yearly GDP growth rose to its highest in 3yrs at 3.1%, boosting investors’ optimism of economic growth in 2019, with the 10yr U.S. bond treasury yield rising to ca +2.713%.

We maintain our expectation of a more challenging year for global economic growth, with both U.S. and China expected to grow a slower paces in 2019, on the back of continued uncertainties of U.S./China trade tensions and expectation of lower crude oil demand vs 2018. We also expect this to keep the U.S. Federal Reserve Bank benchmark rate at current levels for a better part of 2019.





Liquidity in the banking system opened positive today, at ca ₦274.519bn. There was an Open Market Operation (OMO) auction conducted by the Central Bank of Nigeria (CBN) today.

Treasury Bills
Trading activities in the treasury bills secondary market closed on a bullish note today, due to the drop in stop rates at yesterday’s primary market auction and the recent lack of Open Market Operation (OMO) issuance by the Central Bank (CBN). Demand was seen particularly at the long end of the curve, as average rates dropped ca -18bps day-on-day, with the 26 September maturity trading the most to close at 12.54% from 12.61%. Please find below a summary of the results of the OMO auction held today:

Tenor 91-Days 182-Days 364-Days
Maturity Date: 30-May-19 29-Aug-19 27-Feb-20
Amount Offered: ₦ 50 billion ₦ 100.00 billion ₦ 250.00 billion
Subscription: ₦ 55.51 billion ₦ 92.59 billion ₦ 1,217.10 billion
Amount Allotted: ₦ 55.51 billion ₦ 92.59 billion ₦ 927.75 billion
Range of bids: 10.8500% – 11.9000% 12.5900% – 13.5000% 13.9000% – 15.0000%
Stop Rates 11.9000% 13.5000% 14.3000%

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates dropped further to day-on-day to 13.17% and 14.25% from 9.50% and 10.58%. 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.

Trading activities in the bonds secondary market was very bullish today, with demand seen particularly at the mid-to-long end of the curve. Average yield dropped ca -28bps day-on-day, with the February 2028 maturity trading the most to close at 13.91% from 14.39%.

The Nigerian equities market declined for a 3rd consecutive trading day today, with the Nigerian Stock Exchange All Share Index (NSE ASI) losing ca -1.63% day-on-day to close at 31,718.70pts, with market’s year-to-date returns at +0.92%. This was majorly due to price decline in Nestle Nigeria Plc (-2.00%), Guaranty Trust Bank Plc (-6.85%), Nigerian Breweries Plc (-4.45%) and Zenith Bank Plc (-4.02%).

The NSE Oil & Gas, Consumer Goods and Banking indices all lost ca -156ps, -202bps, and -456bps respectively, while the NSE Industrial gained ca +67bps. Guaranty Trust Bank Plc led both the volume and vale charts with 44.62m units traded at ₦1.64bn.

The Naira remained stable against the dollar at the interbank market window today, at ₦306.85/$1. In the parallel market, it remained stable against the Dollar, Pound Sterling and Euro at ₦360/$1, ₦470/₤1 and ₦408/€1 day-on-day, respectively. The Naira appreciated further at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦361.13/$1 from ₦361.21/$1.

Crude oil prices traded mix today, after yesterday’s rally on the back of continued positive sentiments of output-cuts by the Organisation of Petroleum Exporting Countries (OPEC) vs continued rise in U.S. Shale output at ca 12.1 million barrels per day. Brent crude oil price declined ca -0.60% at $65.99pb, while WTI crude gained ca +0.23% at $57.07pb, as at report time. Spot gold lost ca -0.34% day-on-day at $1,316.70 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
LIVESTOCK 0.68 0.05 +7.94%
UNIONDAC 0.30 0.02 +7.14%
UAC-PROP 1.92 0.09 +4.95%
GLAXOSMITH 12.00 0.35 +3.00%
JAIZBANK 0.65 0.01 +1.56%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
OANDO 5.90 -0.65 -9.92%
FCMB 2.03 -0.22 -9.78%
DANGFLOUR 10.90 -1.05 -8.79%
JAPAULOIL 0.22 -0.02 -8.33%
DIAMONDBNK 2.26 -0.19 -7.76%
Benchmark T-Bills Discount Rates
28-Feb-19 27-Feb-19 Change in Rates
91Days 9.57% 10.83% -1.26%
154Days 12.05% 12.05% 0.00%
343Days 13.75% 14.53% -0.78%
Source: FMDQ DQL for 28 February 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
28-Feb-19 27-Feb-19 Change in Yield
3 yrs: 16.00% 29-Jun 2019 14.98% 14.98% 0.00%
5 yrs: 15.54% 13-Feb 2020 14.22% 14.23% -0.01%
10 yrs: 16.29% 17 Mar 2027 14.20% 14.20% 0.00%
20 yrs: 16.25% 18-Apr 2037 13.82% 14.12% -0.30%
Source: FMDQ DQL for 28 February 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.28% 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
21-Mar-19 21 7.95% 7.99%
09-May-19 70 9.60% 9.78%
01-Aug-19 154 10.70% 11.21%
07-Nov-19 252 12.75% 13.98%


Select Macro-economic Indices
Inflation % (January 2019) 11.37 (-0.61% ytd)
PMI ( February 2019) 57.10
MPR (%) 14 (-5%/+2% around mid-point)
CRR (%) 22.5
Brent Crude Price US$ pbbl 65.99 (-0.60% d/d)
External Reserve (US$’billion) 42.33 (-1.82% ytd)
GDP % (Q4 2018) +2.38% (Q3 2018: +1.81% y/y)
NSE All Share Index (ASI) 31,718.70 (-1.63% d/d; +0.92% ytd)
Market Capitalisation (₦’Trillion) 11.83

Financial Markets Update – 28 February 2019

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