Financial Markets Today

Financial Markets Today

Good Evening,

The Central Bank of Nigeria (CBN), resumed the issuance of OMO auctions in the secondary market yesterday and today, following 2 weeks of its absence. The absence of OMO auctions in the market signaled a loosening monetary stance, with the level of money supply in the banking system, rising to a peak of ca ₦787 billion last week, as bonds and treasury bills rates crashed to 13.87% & 12.96% from 14.90% and 16.49% on 29 November 2017. The Apex bank stated that it would however, continue to issue OMO bills based on the level of liquidity in the system, so as to sustain its liquidity management operations while ensuring price stability in the market. This saw a reversal in the downward trend of rate and yield levels, as they both gained ca 58bps and ca 65bps, respectively.

We anticipate continued issuances of OMO auctions in the near term, to manage the level of liquidity in the system, which could result in further drop in rate and yield levels and encourage arbitrage opportunities in the fragile FX market.

 

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Banking system liquidity opened on a positive note today, with ca ₦90 billion after the debits of ca ₦353 billion from the OMO auction yesterday. In continuance of the CBN’s tight monetary stance, it offered an OMO auction to tighten system liquidity.

Treasury Bills
Trading activities in the treasury bills market was relatively quiet today, with low volumes of trade seen on the mid-end of the curve, while the short and long-dated maturities saw insignificant volumes. The most active maturity was the 12 April 2018 which gained ca 19bp to close at 14.21%, while average rates gained ca 8bps day-on-day. Please find below a summary of the results of the primary market auction held today:

Tenor 101-Days 255-Days
Maturity Date: 1-Mar-18 23-Aug-18
Amount Offered: ₦ 50.00 billion ₦ 100.00 billion
Subscription: ₦ 22.378 billion ₦ 107.336 billion
Amount Allotted: ₦ 22.378 billion ₦ 107.336 billion
Range of bids: 13.7490% – 15.0000% 14.7400% -17.0000%
Stop Rates 13.1000% 14.9000%

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates rose to 17.50% and 18.67% from 12.33% and 13.25%, respectively. Average fixed deposit
rates amongst banks monitored showed:

  • tier-1 rated banks at 3.50% for 30 – 60 days tenor on ₦10mln – ₦100mln.
  • tier-2 rated banks at 8.00% for 30 – 60 days tenor on ₦10mln – ₦100mln.

Bonds
The bonds market continued its quiet trend today, with minimal trades seen across the curve. Average yields gained ca 55bps day-on-day, with March 2027 trading the most, to close at 14.08%.

Equities
The equities market closed on a negative note today, for the 2nd consecutive trading day, as the Nigerian Stock Exchange All Share Index (NSE ASI) lost -0.46% to close at 37,783.76pts, with market’s year-to-date returns further depreciating to +40.59%. This was due to price depreciation in highly capitalized stocks such as Dangote Cement Plc (-0.65%), Nigerian Breweries Plc (-0.22%), Guaranty Trust Bank Plc (- 0.25%), and Zenith Bank Plc (-0.94%). The NSE Banking, Industrial, Consumer Goods and Oil and Gas indices all lost 68bps, 39bps, 24bps and 22bps respectively. Transnational Corporation of Nigeria Plc led the volume chart with 360.34 million units, while Zenith Bank Plc led the value chart with ₦1.59 billion worth of trades.

The Naira remained stable at the interbank market window today, at ₦306.20/$1. In the parallel market, it remained stable against the US Dollar, and Euro at ₦365/$1, and ₦427/€1, respectively, while it appreciated against the Pound Sterling at ₦484/₤1 from ₦485/₤1. It depreciated at the NAFEX window to ₦360.63/$1 from ₦360.43/$1, while it appreciated at the NIFEX window to ₦330.62/$1 from ₦331.28/$1.

Crude oil prices continued its rise today, supported by the continued North Sea Forties pipeline outage, OPEC-led production-cuts, and geopolitical uncertainties in the Middle East after a missile was fired by a Yemeni group at the Saudi capital. Brent Crude price appreciated by +0.81% to $63.74pb, while WTI crude also gained +0.63% to $57.52pb, as at report time. Spot gold lost -0.06% at $1,264.70 per ounce.

 

Top 5 Equitiy Advancers
Name (Symbol) Closing Price Gain(N) % Change
LIVESTOCK 0.86 0.04 +4.88%
UNILEVER 41.99 1.79 +4.45%
ETERNA 4.15 0.16 +4.01%
AIICO 0.53 0.02 +3.92%
LINKASSURE 0.60 0.02 +3.45%
Top 5 Equity Decliners
Name (Symbol) Closing Price Gain(N) % Change
CILEASING 1.33 -0.07 -5.00%
DANGSUGAR 20.57 -1.08 -4.99%
NCR 6.30 -0.33 -4.98%
CHAMPION 2.00 -0.10 -4.76%
ETI 16.80 -0.70 -4.00%
Benchmark T-Bills Discount Rates
19-Dec-17 18-Dec-17 Change in Rates
87 Days 14.13% 14.13% 0.00%
178 Days 14.56% 14.12% 0.44%
346 Days 15.15% 15.15% 0.00%
Source: FMDQ DQL for 19 December 2017
*T-Bills Discount Rates are slightly different from current market rates
Benchmark FGN Bond Yields
19-Dec-17 18-Dec-17 Change in Yield
3 yrs: 16.00% 29-Jun 2019 14.87% 13.69% 1.18%
5 yrs: 15.54% 13-Feb 2020 14.60% 13.67% 0.93%
10 yrs: 16.29% 17 Mar 2027 14.08% 14.15% -0.07%
20 yrs: 16.25% 18-Apr 2037 14.00% 14.00% 0.00%
Source: FMDQ DQL for 19 December 2017
AIICO Money Market Fund (AMMF)
Net Yield (As at current date) 18.86% 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 14.50 15.50 16.50 17.50 18.00
50,000,001 – 100,000,000 15.50 16.50 17.00 18.00 19.50
100,000,001 – 400,000,000 16.50 17.00 17.50 18.50 20.00
Trading Treasury Bills Rates p.a.
Maturity Dates Tenor (Days) Discount Rate Effective Yield
28-Dec-17 9 7.30% 7.31%
10-May-18 142 11.00% 11.49%
12-Jul-18 205 11.00% 11.72%
01-Nov-18 317 12.00% 13.40%

 

Select Macro-economic Indices
Inflation % (October 2017) 15.90 (2017; down -14.29% ytd)
PMI (November 2017) 55.9
MPR (%) 14 (-5/+2 around mid-point)
CRR (%) 22.5
Brent Crude Price US$ pbbl 63.74 (+0.81% d/d)
External Reserve (US$’bi l l ion) 36.85 (+42.61% ytd)
GDP % (Q3 2017) +1.40% (ful l year 2016: -1.68% y/y)
NSE Al l Share Index (ASI) 37,783.76 (-0.46% d/d; +40.59% ytd)
Market Capi tal i s ati on (₦’Tri l l i on) 13.45