Financial Markets Today

Financial Markets Today

Global crude oil prices rose to their highest in 2019 today and ending Q1 2019 with ca +27% year-to-date gains, with Brent crude oil price recording its best quarter-on-quarter performance since Q2 2009, trading at ca $68.89 per barrel on rising positive sentiments of renewed U.S./China trade negotiations after yesterday’s reports of proposed new trade offers by China to the U.S. Gains recorded was also supported by current output-cuts by the Organisation of Petroleum Exporting Countries (OPEC) with expectation for a further drop in crude oil production from OPEC in April, its 4th consecutive month-on-month output-cut in 2019 and on expectation of significant fall in April’s export from OPEC’s largest crude oil producer – Saudi Arabia, with export expected to drop to ca 7 million barrels per day vs previous 10 million barrels per day.

 

We expect current positive sentiments on global crude oil prices to be sustained in the near term, on rising expectation of a trade deal to be reached between the U.S. and China, supporting economic activities in the world’s largest economies, despite rising fears of a global economic slowdown in 2019.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Banking system liquidity opened on a positive note today, at ca ₦401.438bn from previous day’s opening of ₦148.785bn. There was no Open Market Operation (OMO) auction today by the Central Bank of Nigeria (CBN).

Treasury Bills

Trading activities in the treasury bills secondary market improved today on increased liquidity in the interbank market. Most of today’s activities was seen at the long end of the curve, with average rates gaining ca +6bps day-on-day. The 23 January 2020 maturity traded the most to close at 12.90%.

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates dropped day-on-day to 9.86% and 10.67% from 10.07% and 10.71%, 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 bonds secondary market ended the week on a quiet note with yields gaining an average of ca +2bps day-on-day. Most of the activities were at the long-end of the curve with February 2028 trading the most to close at 14.40% from 14.14%..

Eurobonds

Renewed demand for the nation’s debt instruments in the Eurobonds market drove yield levels lower. Average yields shed ca -19bps day-onday, particularly the January 2021 maturity which closed at 5.17% from 4.97%.

Equities
The Nigerian equities market appreciated today, with the Nigerian Stock Exchange All Share Index (NSE ASI) gaining ca +0.67% day-on-day to close at 31,041.42pts, and market’s year-to-date returns at -1.24%. This was largely on the back of gains in Seplat Petroleum Development Company (+9.26%) and Nestle Nigeria Plc (+5.48%).

The NSE Industrial, Oil & Gas and Consumer Goods indices gained +18bps, +484bps and +230bps respectively, while the NSE Banking indices lost ca -108bps. Fidelity Bank Plc led the volume chart with 58.1m units while United Bank for Africa led the value chart at ₦280m.

The Naira remained stable against the dollar in both the interbank and parallel markets today, at ₦306.95/$1 and ₦360/$1 respectively. It was also unchanged against the Pound sterling and Euro in the parallel market at ₦475/₤1 and ₦406/€1 respectively, while it gained at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦360.47/$1 from ₦360.39/$1.

Brent crude oil prices gained today, closing the quarter with a gain of ca +27% year-to-date on the back of announcement of renewed trade negotiations between U.S. and China. Brent crude oil price gained ca +0.86% at $68.40pb, while WTI gained ca +1.35% at $60.10pb, as at report time. Spot gold gained ca +0.19% to $1,297.70 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
VETBANK 3.70 0.37 +10.0%
IKEJAHOTEL 1.71 0.17 +9.94%
ETERNA 4.85 0.45 +9.28%
SEPLAT 540.00 50.00 +9.26%
CAVERTON 2.35 0.14 +5.96%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
UNIONDAC 0.33 -0.03 -9.09%
CUTIX 2.03 -0.18 -8.87%
FIDELITYBK 2.26 -0.20 -8.85%
MBENEFIT 0.24 -0.02 -8.33%
CADBURY 10.90 -0.90 -8.26%
Benchmark T-Bills Discount Rates
29-Mar-19 28-Mar-19 Change in Rates
69Days                                      . 12.19% 12.03% -0.20%
160Days 13.09% 13.15% -0.22%
335Days. 12.86% 12.76% -0.06%
Source: FMDQ DQL for 29 March 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
29-Mar-19 28-Mar-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 14.05% 14.06% -0.01%
5 yrs: 15.54% 27-Apr 2023 14.23% 13.81% 0.42%
10 yrs: 16.29% 17 Mar 2027 14.25% 14.14% 0.11%
20 yrs: 16.25% 18-Apr 2037  . 14.18% 14.16% 0.02%
Source: FMDQ DQL for 29 March 2019
Benchmark FGN EuroBond Yields
29-Mar-19 28-Mar-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.97% 5.17% -0.02%
5 yrs: NGERIA 6 3/8 07/12/23 5.53% 5.69% -0.16%
10 yrs: NGERIA 6 1/2 11/28/27 6.70% 6.89% -0.19%
20 yrs: NGERIA 7.696 02/23/38 7.79% 7.99% -0.20%
30 yrs: NGERIA 9.248 01/21/49 8.26% 8.49% -0.23%
Source: FMDQ DQL for 29 March 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 14.02% 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-19 125 11.15% 12.03%
17-Oct-19 202 12.70% 13.66%
07-Nov-19 223 12.65% 13.71%
16-Jan-20 293 12.65% 14.08%

 

Select Macro-economic Indices
Inflation % (February 2019) 11.31 (-1.14% ytd)
PMI (March 2019) 57.40
MPR (%) 14 (-5%/+2% around mid-point)
CRR (%) 22.5
Brent Crude Price US$ pbbl 68.40 (-0.86% d/d)
External Reserve (US$’billion) 44.04 (+2.14% ytd)
GDP % (Q4 2018) +2.38% (Q3 2018: +1.81% y/y)
NSE All Share Index (ASI)  31,041.42 (+0.67% d/d; -1.24% ytd)
Market Capitalisation (₦’Trillion) 11.67

Financial Markets Update – 29 March 2019

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