All of us at AIICO Capital wish you all the Happiness in the New Year.
Global financial markets appreciated today, on the back of exceptionally strong U.S. jobs data, indicating a month-on-month growth of 312,000 in December vs market analysts’ expectation of +176,000. This comes as China announced progress in its trade talks with the U.S., further elevating investors sentiments around risk assets, with the U.S. Dow Jones Industrial Average (DJIA), S & P 500, NASDAQ, German DAX, London’s FTSE, French CAC, Chinese SHANGHAI indices all appreciating by ca +2.76%, +2.84%, +3.73%, +3.37%, +2.16%, +2.72%, and +2.05%, while the Morgan Stanley Capital International (MSCI) Emerging Market Index gained +3.25%.
We expect investors optimism to remain positive in the near term on the back of current positive economic data and moves by the Peoples Bank of China (PBC) to boost economic activities in China, lowering its Reserve Requirement Ratio (RRR) by 100bps. However, we expect global financial markets uncertainties to remain strong in 2019 on growing expectation of a slowdown in global economic activities in 2019, and as Central Banks of developed economies maintain their monetary policy normalization drive, with both the U.S. Federal Reserve Bank and European Central Bank (ECB) expected to raise their benchmark interest rates this year.
Liquidity in banking system opened on a positive note today, with ca ₦267bn. There was no Open Market Operations (OMO) auction conducted by the Central Bank of Nigeria (CBN) today.
A more active trading day in the treasury bills secondary market today, with some sell-offs seen towards the close of market activities, particularly at the short-end of the curve. Average rate lost ca -2bps day-on-day, with the 28 February 2019 maturity trading the most to close at 14.66% from 14.43%.
Open Buy Back (OBB) and Overnight (O/N) rates rose to 20.00% and 23.75% from 14.08% and 14.92% 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 8.00% for 30 – 60 days tenor on ₦10mln – ₦100mln.
A relatively quiet bond secondary market today, with activities seen at the short-to-mid end of the curve. Average yields lost ca -13bps day-on-day, with the February 2028 maturity trading the most to close at 15.54% from 15.67%.
The Nigerian equities market dropped today, as the Nigerian Stock Exchange All Share Index (NSE ASI) lost ca -0.43% day-on-day to close at 30,638.90pts, with market’s year-to-date returns at -2.52%. This was mainly due to price depreciation in Zenith Bank Plc (- 4.41%).
The NSE Industrial, Consumer Goods, Oil & Gas and Banking indices lost ca -50bps, -8bps, -76bps and -93bps respectively, while NSE gained ca +64bps. AIICO Insurance Plc led the volume chart with 82.72m units while Zenith Bank Plc led the value chart with ₦574.34mn worth of trades.
The Naira remained stable against the dollar at the interbank market window today, at ₦306.95/$1. In the parallel market, it appreciated against the Dollar and Pound Sterling at ₦362/$1 and ₦460/₤1 from ₦361/$1 and ₦458/₤1 respectively, while it remained stable against the Euro at ₦410/€1. The Naira depreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦364.75/$1 from ₦364.50/$1.
Crude oil prices rose sharply today, as China announced plans to hold trade talks with the U.S. This comes as jobs data from the U.S. rose by 312,000 in December vs 176,000 expected by market analysts and was on the back of the report by the American Petroleum Institute (API) indicating a decline of 4.5million in crude inventory in December, with a Reuters survey also indicated a drop of ca 460,000 barrels per day in output from the Organisation of Petroleum Exporting Countries (OPEC). Brent crude oil price gained +3.24% at $57.76pb, while WTI crude appreciated by ca +3.36% at $46.09pb, as at report time. Spot gold declined by ca -0.96% day-on-day at $1,282.40 per ounce.
|AIICO Money Market Fund (AMMF)|
|Net Yield (As at current date)||13.13% per annum|
|Added Benefit||Personal accident insurance cover|
|AIICO Capital Guaranteed Income Note (GIN) Rates p.a.|
|Amount (NGN)||30 Days||60 Days||90 Days||180 Days||364 Days|
|10,000,001 – 50,000,000||10.00||10.50||11.00||12.00||13.00|
|50,000,001 – 100,000,000||11.00||11.25||11.50||12.50||14.00|
|100,000,001 – 400,000,000||12.00||12.25||12.50||13.00||14.50|
|Trading Treasury Bills Rates p.a.|
|Maturity Dates||Tenor (Days)||Discount Rate||Effective Yield|
|Select Macro-economic Indices|
|Inflation % (November 2018)||11.28 (-26.61% ytd)|
|PMI (December 2018)||61.10|
|MPR (%)||14 (-5/+2 around mid-point)|
|Brent Crude Price US$ pbbl||57.76 (+3.24% d/d)|
|External Reserve (US$’billion)||43.08 (-0.10% ytd)|
|GDP % (Q3 2018)||+1.81% (Q2 2018: +1.50% y/y)|
|NSE All Share Index (ASI)||30,638.90 (-0.46% d/d; -2.52% ytd)|
|Market Capitalisation (₦’Trillion)||11.43|