Financial Markets Today

Financial Markets Today

Global equities markets began the week on a positive note today, with most benchmark indices of developed economies gaining day-onday. The U.S. Dow Jones Industrial Average (DJIA), S & P 500, NASDAQ, London’s FTSE and Chinese SHANGAI indices all gained ca +0.12%, +0.28%, +0.89%, +0.20% and +1.30% respectively, while the Morgan Stanley Capital International (MSCI) Emerging Market Index rose +0.35%. This comes as the Portfolio inflows to Emerging Markets (EMs) in January 2019 rose since January 2018 at $51 billion with flows to equities accounting for 65% of total flows at ca $33 billion while flows to debt risk assets was ca $18 billion.

With high expectation for slower global economic growth in 2019 on the back of expected slowdown in the world’s largest economies – U.S. and China, and with the U.S. Federal Reserve Bank expected to keep benchmark interest rate in tandem with growth in the U.S., we expect a gradual rise in investors’ appetite for global risk assets in the near term to drive flows to some Emerging (EMs) and Frontier (FMs) Markets.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Liquidity in the banking system was expected to open positive today. in line with the tight monetary policy stance of the Central Bank of Nigeria (CBN), an Open Market Operation (OMO) auction was conducted today.

Treasury Bills
A relatively very active trading day in the treasury bills secondary market, with a bullish run from start of trading despite the announcement of an Open Market Operation (OMO) auction by the Central Bank (CBN). Average rate lost ca -15ps day-on-day, with the 21 February 2019 maturity trading the most to close at 10.94%. Please find below a summary of the results of today’s OMO auction:

Tenor 108-Days 192-Days 360-Days
Maturity Date: 23-May-19 15-Aug-19 30-Jan-20
Amount Offered: ₦ 20.00billion ₦ 30.00billion ₦ 100.00 billion
Subscription: ₦ 7.58billion ₦ 15.94billion ₦109.14 billion
Amount Allotted: ₦ 7.58billion ₦ 15.94billion ₦ 109.14 billion
Range of bids: 11.9000% – 11.9000% 13.5000% – 15.0000% 15.0000% – 15.0000%
Stop Rates 11.9000% 13.5000% 15.0000%


Bank Placements

Open Buy Back (OBB) and Overnight (O/N) rates rose to 16.83% and 17.77% from 11.07 % and 11.86%. 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 very quiet trading session in the bonds secondary market today, with only a few trades seen demand seen particularly on the February 2028 maturity. Average yields declined ca -4bps day-on-day, with the February 2028 maturity trading the most to close at 15.26%.

Equities
The Nigerian equities market appreciated further today, with the Nigerian Stock Exchange All Share Index (NSE ASI) gaining ca +0.35% day-on-day to close at 30,745.05pts, with market’s year-to-date returns at -2.18%. This was majorly due to gains in Guaranty Trust Bank Plc (+0.45%), Nigerian Breweries Plc (+5.27%) and Stanbic IBTC Holdings Plc (+1.55%).
The NSE Banking, Consumer Goods and Industrial indices gained ca +19bps, +107bps and +2bps respectively day-on-day, while the NSE Oil & Gas index declined ca -112bps. Fidelity Bank Plc led the volume chart with 36.62m while Zenith Bank Plc led the value chart with ₦249.78mn.

The Naira remained stable against the dollar at the interbank market window today, at ₦306.75/$1. In the parallel market, it appreciated against the Dollar at ₦360/$1 from ₦361/$1, while remaining stable against the Pound Sterling and Euro at ₦472/₤1 and ₦411/€1. The Naira appreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦362.50/$1 from ₦362.68/$1.

Crude oil prices dropped today, on profit taking after 4 consecutive days of gains. Brent crude oil price lost ca -0.81% at $62.24pb, while WTI crude also dropped ca -2.06% at $54.12pb, as at report time. Spot gold dropped ca -0.22% day-on-day at $1,319.20 per ounce.

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
REDSTAREX 5.50 0.50 +10.00%
IKEJAHOTEL 1.65 0.15 +10.00%
MCNICHOLS 0.39 0.03 +8.33%
CUTIX 1.90 0.10 +5.56%
NB 77.90 3.90 +5.27%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
CHAMPION 1.62 -0.18 -10.00%
ACADEMY 0.41 -0.04 -8.89%
UNITYBNK 0.82 -0.08 -8.89%
FO 27.00 -2.50 -8.47%
ROYALEX 0.28 -0.02 -6.67%
Benchmark T-Bills Discount Rates
04-Feb-19 1-Feb-19 Change in Rates
73Days 11.48% 11.48% 0.00%
164Days 12.96% 12.96% 0.00%
311Days 14.86% 14.79% -0.07%
Source: FMDQ DQL for 04 February 2019
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
04-Feb-19 01-Jan-19 Change in Yield
3 yrs: 16.00% 29-Jun 2019 13.21% 13.52% -0.31%
5 yrs: 15.54% 13-Feb 2020 15.35% 15.23% 0.12%
10 yrs: 16.29% 17 Mar 2027 14.91% 14.91% 0.00%
20 yrs: 16.25% 18-Apr 2037 15.01% 15.00% 0.01%
Source: FMDQ DQL for 04 February 2019
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 13.15% 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
28-Feb-19 24 8.45% 8.50%
21-Mar-19 45 9.20% 9.31%
01-Aug-19 178 12.70% 13.54%
07-Nov-19 276 14.20% 15.91%

 

Select Macro-economic Indices
Inflation % (December 2018) 11.44 (-25.57% ytd)
PMI (December 2018) 61.10
MPR (%) 14 (-5%/+2% around mid-point)
CRR (%) 22.5
Brent Crude Price US$ pbbl 62.24 (-0.86% d/d)
External Reserve (US$’billion) 43.17 (+0.11% ytd)
GDP % (Q3 2018) +1.81% (Q2 2018: +1.50% y/y)
NSE All Share Index (ASI) 30,745.05 (+0.35% d/d; -2.18% ytd)
Market Capitalisation (₦’Trillion) 11.46
Financial Markets Update – 04 February 2019 
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