Financial Markets Today

Financial Markets Today

U.S. equities rallied for a third consecutive trading day today, on renewed positive sentiments of global trade tensions, after reports that the U.S. could delay earlier announced tariffs on imports from Mexico, set to commence 10 June. This comes as the U.S. Federal Reserve is set to meet later this month, with increasing market analysts sentiments for a possible rate cut sooner than previously expected. The Dow Jones Industrial Average (DJIA), S & P 500 and NASDAQ indices all gained ca +0.97, +0.61 and +0.53%.

We expect current positive sentiments to be sustained in the short term. However, we do not expect the U.S. Federal Reserve Bank to be in a rush to make changes to its current rate stance at 2.25% – 2.50% at its next meeting on 18 – 19 June, with a close watch on rising expectation of a higher negative impact of current global trade war on economic growth, even in Developed Economies (DMs) like the U.S.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Banking system liquidity opened positive today at ca ₦291.56bn lower than ca ₦510.06bn recorded on Monday. The Central Bank of Nigeria (CBN) conducted an Open Market Operation (OMO) auction today to mop up the excess liquidity.

Treasury Bills
The treasury bills secondary market was bearish today, fresh off the back of a 2-day holiday, as market reacted to another Open Market Operation (OMO) auction conducted by the Central Bank (CBN). Average rates gained ca +18bps day-on-day, with the 19 September 2019 maturity closing at 12.50% from 12.06%. Please find below details of the OMO auction:

Tenor 98-Days 175-Days 364-Days
Maturity Date: 12-Sep-19 28-Nov-19 04-Jun-20
Amount Offered: ₦20.000 billion ₦30.000 billion ₦120.000 billion
Subscription ₦0.071 billion ₦2.130 billion ₦155.830 billion
Amount Allotted: ₦0.071 billion ₦2.130 billion ₦155.780 billion
Range of bids 11.3500% – 11.4000% 11.6300% – 11.6300% 12.4200% – 12.5000%
Stop Rate 11.4000% 11.6300% 12.4800%

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates traded higher day-on-day at 8.29% and 9.21% from 9.29% and 10.21%, with improved interbank liquidity. 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 most of the activities at the mid-to-long end of the curve. Average yields gained ca +17bps day-on-day, with February 2028 maturity closing at 14.50% from 14.26%.

Eurobond

The nation’s Eurobonds market traded on a very bullish note today, with investors having a positive outlook on emerging markets. Average yields shed ca -21bps day-on-day with the February 2038 maturity closing at 8.18% from 8.42%.

Equities
The Nigerian equities market commenced the week negative today, with the Nigerian Stock Exchange All Share Index (NSE ASI) shedding ca -1.30% day-on-day to close at 30,527.07pts, while the market’s year-to-date returns declined to -2.87%. This was largely due to losses in Guinness Nigeria Plc (-2.06%) and Guaranty Trust Bank Plc (-1.92%).

The NSE Banking, Consumer goods and Industrial indices lost ca -66bps, -9bps and -280bps respectively, while the Oil & Gas index gained ca +203bps. Guaranty Trust Bank Plc led both the volume and charts with 82.82m units traded at ca ₦2.59bn..

The Naira remained flat against the dollar in both the interbank and parallel markets at ₦306.90/$1 and ₦361/$1 respectively. It also remained stable against the Euro at ₦402/€1 and the Pound sterling at ₦465/₤1, in the parallel market. The FMDQ Nigerian Autonomous Foreign Exchange (NAFEX) Fixing rate depreciated day-on-day at ₦360.44/$1 from ₦360.39/$1.

Crude oil prices rallied today shaking off losses from the beginning of the week, as market reacted to a report that the U.S. may delay sanctions on Mexico which were supposed to commence next week Monday, 10 June. Brent crude oil price gained ca +1.96% day-on-day at $61.82pb, while WTI gained ca +2.07% day-on-day at $52.72pb, as at report time. Spot gold gained ca +0.3449% at $1,338.20 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
JBERGER 21.65 1.95 +9.90%
CHAMPION 1.20 0.09 +8.11%
ACADEMY 0.29 0.02 +7.41%
LIVESTOCK 0.63 0.04 +6.78%
UACN 6.60 0.35 +5.60%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
THOMASWY 0.36 -0.04 -10.00%
CAPOIL 0.21 -0.02 -8.70%
COURTVILLE 0.22 -0.02 -8.33%
NEM 2.05 -0.18 -8.07%
JAIZBANK 0.46 -0.02 -4.17%
Benchmark T-Bills Discount Rates
06-Jun-19 03-Jun-19 Change in Rates
91 Days                                      . 12.27% 12.12% 0.15%
182 Days- 12.10% 12.08% 0.02%
357 Days. 12.45% 12.20% 0.25%
Source: FMDQ DQL for 06 June 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
06-Jun-19 03-Jun-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 14.26% 14.26% 0.00%
5 yrs: 15.54% 27-Apr 2023 14.33% 14.33% 0.00%
10 yrs: 13.98% 17 Mar 2027 14.50% 14.26% 0.24%
20 yrs: 16.25% 18-Apr 2037  . 14.54% 14.54% 0.00%
Source: FMDQ DQL for 06 June 2019
Benchmark FGN EuroBond Yields
06-Jun-19 03-Jun-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.77% 4.98% -0.21%
5 yrs: NGERIA 6 3/8 07/12/23 5.56% 5.75% -0.19%
10 yrs: NGERIA 6 1/2 11/28/27 7.26% 7.46% -0.20%
20 yrs: NGERIA 7.696 02/23/38 8.18% 8.42% -0.24%
30 yrs: NGERIA 9.248 01/21/49 8.73% 8.98% -0.25%
Source: FMDQ DQL for 06 June 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.19% 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 56 9.65% 9.80%
17-Oct-19 133 12.10% 12.66%
07-Nov-19 154 11.60% 12.20%
16-Jan-20 224 12.00% 12.95%
Select Macro-economic Indices
Inflation % (April 2019) 11.37 (+1.07% ytd)
PMI (May 2019) 57.80
MPR (%) 13.5 (-5%/+2% around mid-point)
CRR (%) 22.5
Brent Crude Price US$ pbbl 60.57 (-0.10% d/d)
External Reserve (US$’billion) 45.139 (+1.84% ytd)
GDP % (Q4 2018) +2.01% (Q4 2018: +2.38% y/y)
NSE All Share Index (ASI) 31,527.07 (-1.30% d/d; -2.87% ytd)
Market Capitalisation (₦’Trillion) 13.44

Financial Markets Update – 06 June 2019

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