Global financial markets declined today, with global benchmark equity indices declining day-on-day as investors’ interest in fixed income riskassets of developed economies rose. The U.S. Dow Jones Industrial Average (DJIA), S & P 500, NASDAQ, German DAX and London’s FTSE all declined ca -0.54%, -0.56%, -0.78%, -0.60% and -0.53% respectively, with yields on government treasury bonds dropping to new month-to date lows on increased demand for safe-haven assets. This comes after the European Central Bank (ECB) lowered its forecast for economic growth in the Eurozone to 1.1% for 2019 from previous 1.7% and announced plans to introduce a new series of quarterly targeted longer term refinancing operations (TLTRO-III) for banks in the Eurozone beginning October 2019 to boost economic activities, while keeping its benchmark interest rate unchanged till 2020.
We expect increased investors uncertainties of global economic growth in 2019 and further rise in volatility in the financial markets as investors assess potential negative impacts of reduced lower expectation of growth in the world’s largest economies in 2019.
Banking system liquidity opened positive today, at ca ₦379bn and rose further with the credit of maturing Open Market Operations (OMO) treasury bills of ca ₦228bn. There was an OMO auction conducted by the Central Bank of Nigeria (CBN) today.
Continued interest at the long-end of the curve drove trading activities in the treasury bills secondary market today. Average rates dropped ca -0.12%bps day-on-day, with the 20 February maturity trading the most to close at 12.74% from 13.25%. Please find below a summary of the results of the Open Market Operation (OMO) auction held today:
|Amount Offered:||₦ 50.00 billion||₦ 100.00 billion|
|Subscription:||₦ 28.58 billion||₦ 149.33 billion|
|Amount Allotted:||₦ 28.58 billion||₦ 140.58 billion|
|Range of bids:||11.8000% – 11.9000%||13.3400% – 13.4800%|
Open Buy Back (OBB) and Overnight (O/N) rates dropped day-on-day to 8.50% and 9.58% from 8.83% and 9.75%. 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.
Continued relative quiet trading day in the bonds secondary market today, with some demand seen particularly at the long end of the curve. Average yields dropped ca -18bps day-on-day, with the March 2036 maturity trading the most to close at 14.16%.
The Nigerian equities market declined for a 2nd consecutive trading day, with the Nigerian Stock Exchange All Share Index (NSE ASI) losing ca -0.35% day-on-day to close at 32,010.06pts, with market’s year-to-date returns at +1.84%. This was largely due to price loses in Dangote Cement Plc (-0.76%) and Guaranty Trust Bank Plc (-0.79%).
The NSE Oil & Gas, Consumer Goods, Banking and Industrial indices all lost ca -97bps, -17bps, -13bps and -39bps respectively. Zenith Bank Plc led both the volume and value charts with 34.81m units traded at ₦859.73mn.
The Naira remained stable against the dollar at the interbank market window today, at ₦306.90/$1. In the parallel market, it remained stable against the Dollar and Euro at ₦360/$1 and ₦408/€1 respectively, while depreciating against the Pound Sterling at ₦472/₤1 from ₦470/₤1. The Naira appreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦360.17/$1 from ₦360.29/$1.
Crude oil prices gained today, on continued positive impact of output cuts by the Organisation of Petroleum Exporting Countries (OPEC) and limiting supply from Venezuela and Iran on U.S. sanctions. Brent crude oil price gained ca +0.41% at $66.26pb, while WTI crude gained ca +0.71% at $56.62pb, as at report time. Spot gold lost ca -0.12% day-on-day at $1,286.10 per ounce.
|AIICO Money Market Fund (AMMF)|
|Net Yield (As at current date)||13.28% per annum|
|Added Benefit||Personal accident insurance cover|
|AIICO Capital Guaranteed Income Note (GIN) Rates p.a.|
|Amount (NGN)||30 Days||60 Days||90 Days||180 Days||364 Days|
|10,000,001 – 50,000,000||10.00||10.50||11.00||12.00||13.00|
|50,000,001 – 100,000,000||11.00||11.25||11.50||12.50||14.00|
|100,000,001 – 400,000,000||12.00||12.25||12.50||13.00||14.50|
|Trading Treasury Bills Rates p.a.|
|Maturity Dates||Tenor (Days)||Discount Rate||Effective Yield|
|Select Macro-economic Indices|
|Inflation % (January 2019)||11.37 (-0.61% ytd)|
|PMI (February 2019)||57.10|
|MPR (%)||14 (-5%/+2% around mid-point)|
|Brent Crude Price US$ pbbl||66.26 (+0.41% d/d)|
|External Reserve (US$’billion)||42.32 (-1.86% ytd)|
|GDP % (Q4 2018)||+2.38% (Q3 2018: +1.81% y/y)|
|NSE All Share Index (ASI)||32,010.06 (-0.35% d/d; +1.84% ytd)|
|Market Capitalisation (₦’Trillion)||11.94|