Financial Markets Today

Financial Markets Today

Investors’ recessionary fears further eased today, as increased demand for equities pulled U.S. benchmark equity indices to a one-month high, with the U.S. Dow Jones Industrial Average (DJIA), S & P 500, NASDAQ indices all gaining ca +1.46%, +1.27%, and +1.59% day-on-day. This comes of the back of renewed trade negotiations with the announcement of a scheduled U.S./China trade talk in early October, as well as the release of better-than-expected Non-Manufacturing Purchasing Managers’ Index (PMI) data at 56.4pts vs market analysts’ expectation of 54pts.

We expect further rise in investors’ risk-on sentiments in the near term, on growing optimism of a resolution of current U.S./China trade tensions, despite expected implementation of higher tariffs on ca $250billion of Chinese imports by the U.S. from 01 October.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Amount of money in the banking system opened on a positive note today, at ca ₦866.77bn higher than yesterday’s opening of ca ₦164.73bn, on inflow from Open Market Operations (OMO) maturities of ca ₦553bn today. The CBN conducted an OMO auction today to tighten the interbank market.

Treasury Bills
The treasury bills secondary market rallied and closed on a bullish note today, buoyed by robust interbank liquidity. Demand was seen across the curve with average rates losing ca -20bps day-on-day. The 13 August 2020 maturity traded the most to close at 13.38% from 13.73%. Please find below a summary of the OMO auction results:

Tenor 84-Days 189-Days 364-Days
Maturity Date: 28-Nov-19 12-Mar-20 03-Sep-20
Amount Offered: ₦50.00 billion ₦100.00 billion ₦250.00 billion
Subscription ₦20.17 billion ₦23.04 billion ₦408.12 billion
Amount Allotted: ₦0.64 billion ₦0.48 billion ₦312.48 billion
Range of bids 11.5900% – 12.7500% 11.7900% – 13.3000% 13.4900% – 14.5000%
Stop Rate 11.5900% 11.7900% 13.5000%

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates traded lower day-on-day at 4.21% and 5.14% from 8.64% and 9.50% 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
Trading activities in the domestic bonds secondary market continued on a relatively quiet note today, with transactions largely focused at the mid-end of the curve. Average yields remained unchanged day-on-day with the April 2049 maturity closing at 14.56%.

Eurobond

The nation’s Eurobonds market continued on a bullish note today as demand persisted across the curve. Yields trended downwards on the back of renewed risk-on sentiments amidst rising optimism of a resolution to current U.S./China trade tensions. Average yields lost ca -21bps day-on-day, with the January 2049 maturity closing at 8.00% from 8.20%.

Equities
The Nigerian equities market closed the day on a negative note, as the Nigerian Stock Exchange All Share Index (NSE ASI) lost ca -0.25% day-on-day to close at 27,252.09pts, with market’s year-to-date returns at -13.29%. This was mainly due to losses in MTN Nigeria Plc (-0.32%) and Zenith Bank Plc (-0.86%).
The NSE Industrial Goods index remained the sole gainer for the 2nd consecutive day rising by ca +67bps day-on-day, while the NSE Oil & Gas, Banking, and Consumer Goods indices all lost ca -8bps, -18bps, and -17bps respectively. Guaranty Trust Bank Plc led both the volume and value charts with ca 35m units traded at ca ₦925.88mn.

The Naira remained stable against the dollar day-on-day in both the interbank and parallel markets to close at ₦306.95/$1 and ₦360/$1 respectively. In the parallel market, it appreciated against the Pound Sterling and the Euro day-on-day to close at ₦447/₤1 and ₦398/€1 from ₦450/₤1 and ₦400/€1 respectively. The FMDQ Nigerian Autonomous Foreign Exchange (NAFEX) Fixing rate appreciated day-on-day to close at ₦362.25/$1 from ₦362.34/$1.

Crude oil prices appreciated further today, as data released by the Energy Information Administration (EIA) showed U.S. crude stockpile declined by 4.77 million barrels week-on-week. This comes on the back of reports of a proposed meeting between U.S. and China scheduled for October, for a possible resolution of current trade tension. Brent crude oil price gained ca +1.96% day-on-day at $61.89pb, while WTI gained ca +1.81% day-on-day at $57.28pb, as at report time. Spot gold shed ca +2.23% at $1,525.60 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
UACN  5.00 0.45 +9.89%
UAC-PROP  0.90 0.08 +9.76%
AFRIPRUD  3.95 0.32 +8.82%
LINKASSURE  0.52 0.04 +8.33%
INTBREW  11.90 0.90 +8.18%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
GUINNESS  37.30 -4.10 -9.90%
IKEJAHOTEL  1.29 -0.14 -9.79%
FO  14.85 -1.60 -9.73%
ETERNA  2.65 -0.15 -5.36%
WAPIC  0.36 -0.02 -5.26%
Benchmark T-Bills Discount Rates
05-Sep-19 04-Sep-19 Change in Rates
91 Days
12.80%
12.80% 0.00%
175 Days
12.89%
13.28% -0.39%
343 Days
13.38%
13.73% -0.35%
Source: FMDQ DQL for 05 September 2019
Benchmark FGN Bond Yields
05-Sep-19 04-Sep-19 Change in Yield
3 yrs: 16.00% 15-Jul-2021 14.00% 12.58% -0.58%
5 yrs: 15.54% 27-Apr 2023 14.41% 14.42% -0.01%
10 yrs: 13.98% 23-Feb 2028 14.23% 14.21% 0.02%
20 yrs: 16.25% 18-Apr 2037 14.30% 14.30% 0.00%
30 yrs: 14.80% 26-Apr 2049 14.56% 14.56% 0.00%
Source: FMDQ DQL for 05 September 2019
Benchmark FGN EuroBond Yields
05-Sep-19 04-Sep-19 Change in Yield
3 yrs: NGERIA 6 3/4 01/28/21 4.01% 4.18% -0.07%
5 yrs: NGERIA 6 3/8 07/12/23 4.75% 4.88% -0.13%
10 yrs: NGERIA 6 1/2 11/28/27 6.22% 6.41% -0.19%
20 yrs: NGERIA 7.696 02/23/38 7.30% 7.57% -0.27%
30 yrs: NGERIA 9.248 01/21/49 8.00% 8.20% -0.20%
Source: FMDQ DQL for 05 September 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 12.14% 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
31-Oct-19 56 12.20 % 12.43%
16-Jan-20 133 12.25% 12.82%
28-May-20 266 12.60% 13.87%
18-Jun-20 287 12.50% 13.86%
Select Macro-economic Indices
Inflation % (July 2019) 11.08 (-2.55% ytd)
PMI (August 2019) 57.90
MPR (%) 13.5 (-5%/+2% around mid-point)
CRR (%) 22.5
Brent Crude Price US$ pbbl 61.89 (+1.96% d/d)
External Reserve (US$’billion) 43.188 (+1.36% ytd)
GDP % (Q2 2019) +1.94% (Q1 2019: +2.10% y/y)
NSE All Share Index (ASI) 27,252.09 (-0.25% d/d; -13.29 ytd)
Market Capitalisation (₦’Trillion) 13.26

Financial Markets Update – 05 SEPTEMBER 2019

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