Global equities market rallied today, opening the week on the back of positive investors’ sentiments after Chinese data released today, indicated an unexpected rise in Manufacturing activities in March, its highest in 4 months. The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) rose above the 50pts mark to 50.8pts vs analysts expectation of 49.9pts, with new orders also rising to their highest level in four months, indicating a moderate growth in both domestic and external demand in March. This comes on the back implemented ca 2 trillion Yuan (ca $298 billion) worth of tax-cuts by the Chinese government in its attempt to stimulate economic activities in the world’s 2nd largest economy.
We expect Chinese economic growth in 2019 to remain below its 9-year growth average, with GDP growth outlook at its lowest in 28-years, at ca 6.00% – 6.50% and continued uncertainties of U.S./China trade negotiations. We also expect the Chinese government to implement further economic stimulus in 2019 in an attempt to improve economic activities.
Banking system liquidity opened on a positive note today, at ca ₦316.507bn from previous day’s opening of ₦401.438bn. There was no Open Market Operation (OMO) auction today by the Central Bank of Nigeria (CBN).
Trading activities in the treasury bills secondary market remained bullish today, on the back of improved banking system liquidity and a lack of Open Market Operation (OMO) auction by the Central Bank of Nigeria (CBN). Most of today’s activities was seen on short-to-mid dated maturities, with average rates shedding ca -13bps day-on-day. The 06 June 2019 maturity traded the most to close at 11.80% from 12.01%.
Open Buy Back (OBB) and Overnight (O/N) rates dropped further day-on-day to 5.00% and 5.57% from 9.86% and 10.67%, 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 7.00% for 30 – 60 days tenor on ₦10mln – ₦100mln.
The bonds secondary market commenced the week on a very quiet note with few transactions and average yields gaining ca +8bps day-on-day. Most of markets activities were at the mid-to-long end of the curve with Feb 2028 trading the most to close at 14.48% from 14.14%.
Demand persists in the nations Eurobonds as crude oil prices continue upwards. Average yields shed ca -7bps day-on-day, particularly the November 2027 maturity which closed at 6.62% from 6.70%.
The Nigerian equities market depreciated today, with the Nigerian Stock Exchange All Share Index (NSE ASI) shedding ca -1.66% day-on-day to close at 30,527.50pts, and market’s year-to-date returns at -2.86%. This was largely on the back of losses in Nigerian Breweries Plc (-5.62%), Guaranty Trust Bank Plc (-0.14%) and Nestle Nigeria Plc (-8.23%).
The NSE Banking, Industrial, Oil & Gas and Consumer Goods indices all lost -41bps, -300bps, -138bps and -492bps respectively. Wema Bank Plc led the volume and value charts with 1.46bn units valued at ₦1.05bn.
The Naira remained stable against the dollar in both the interbank and parallel markets today, at ₦306.95/$1 and ₦360/$1 respectively. It marginally depreciated against the Pound sterling at ₦476/₤1 from ₦475/₤1 and appreciated against the Euro at ₦405/€1 from ₦406/€1 in the parallel market, while it gained at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦360.50/$1 from ₦360.54/$1.
Brent crude oil prices rallied to a new 5-months high today, on the back of returning investors’ positive sentiments of global economic growth and expectation of a drop in supply from Saudi Arabia and the rest of the Organisation of Petroleum Exporting Countries (OPEC) in April. Brent crude oil price gained ca +2.06% at $68.97pb, while WTI gained ca +2.23% at $61.48pb, as at report time. Spot gold lost ca -0.23% to $1,295.50 per ounce.
|Benchmark T-Bills Discount Rates|
|01-Apr-19||29-Mar-19||Change in Rates|
|Source: FMDQ DQL for 01 April 2019
*T-Bills Discount Rates are slightly different from current market rates
|Benchmark FGN Bond Yields|
|1-Apr-19||29-Mar-19||Change in Yield|
|3 yrs: 16.00% 15-Jul-2021||14.47%||14.05%||0.42%|
|5 yrs: 15.54% 27-Apr 2023||14.17%||14.23%||-0.06%|
|10 yrs: 16.29% 17 Mar 2027||14.44%||14.25%||0.19%|
|20 yrs: 16.25% 18-Apr 2037 .||14.18%||14.18%||0.00%|
|Source: FMDQ DQL for 01 April 2019|
|Benchmark FGN EuroBond Yields|
|1-Apr-19||29-Mar-19||Change in Yield|
|3 yrs: NGERIA 6 3/4 01/28/21||4.94%||4.97%||-0.03%|
|5 yrs: NGERIA 6 3/8 07/12/23||5.47%||5.53%||-0.06%|
|10 yrs: NGERIA 6 1/2 11/28/27||6.62%||6.70%||-0.08%|
|20 yrs: NGERIA 7.696 02/23/38||7.72%||7.79%||-0.07%|
|30 yrs: NGERIA 9.248 01/21/49||8.20%||8.26%||-0.06%|
|Source: FMDQ DQL for 01 Apr 2019|
|AIICO Money Market Fund (AMMF)|
|Net Yield (As at current date)||13.82% per annum|
|Added Benefit||Personal accident insurance cover|
|AIICO Capital Guaranteed Income Note (GIN) Rates p.a.|
|Amount (NGN)||30 Days||60 Days||90 Days||180 Days||364 Days|
|10,000,001 – 50,000,000||10.00||10.50||11.00||12.00||13.00|
|50,000,001 – 100,000,000||11.00||11.25||11.50||12.50||14.00|
|100,000,001 – 400,000,000||12.00||12.25||12.50||13.00||14.50|
|Trading Treasury Bills Rates p.a.|
|Maturity Dates||Tenor (Days)||Discount Rate||Effective Yield|
|Select Macro-economic Indices|
|Inflation % (February 2019)||11.31 (-1.14% ytd)|
|PMI (March 2019)||57.40|
|MPR (%)||14 (-5%/+2% around mid-point)|
|Brent Crude Price US$ pbbl||68.97 (+2.06% d/d)|
|External Reserve (US$’billion)||44.34 (+2.84% ytd)|
|GDP % (Q4 2018)||+2.38% (Q3 2018: +1.81% y/y)|
|NSE All Share Index (ASI)||30.527.50 (-1.66% d/d; -2.87% ytd)|
|Market Capitalisation (₦’Trillion)||11.47|