Financial Markets Today
Yields in the domestic debt market declined sharply today, with maturities at the long-end of the curve dropping ca 20bps – 32bps to ca 14.40% levels on the April 2037 maturity. This can be attributed to a rise in demand from both local and foreign investors (FPIs) for government bond securities, as inflows from FPIs through the Investors and Exporters FX (I & E FX) window rose to ca $1.3 billion in January 2019 vs $0.459 billion in December 2018.
We expect a rise in volatility of fixed income yields as we head into the week of general elections, and with the Central Bank (CBN) maintaining its tight liquidity stance through the conduct of Open Market Operations (OMO) auctions to reduce banking system liquidity.
MONEY MARKETS
CAPITAL MARKETS
FOREIGN EXCHANGE
COMMODITIES
Banking system liquidity opened negative today, at ca -₦127.81bn. There was no Open Market Operation (OMO) auction conducted by the Central Bank of Nigeria (CBN).
Treasury Bills
A relatively less active trading day in the treasury bills secondary market, with most activities still majorly focused at the short-end of the curve. The 07 March 2019 maturity traded the most to close at 10.66%, with average rate dropping ca -7ps day-on-day.
Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates rose to 18.67% and 19.42% from 17.33% and 18.42%. 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 7.50% for 30 – 60 days tenor on ₦10mln – ₦100mln.
Bonds
A very active trading day in the bonds secondary market today, with demand seen across the curve, particularly on the long dated maturities. The March 2036 maturity remained the most traded to close at 14.61% from 14.81% with average yields dropping ca -6bps dayon-day
Equities
The Nigerian equities market rallied for a 6th consecutive trading day, on the back of gains in highly capitalized as Guaranty Trust Bank Plc (+1.71%), Nestle Nigeria Plc (+2.04%) and Stanbic IBTC Holding Plc (+0.21%). The Nigerian Stock Exchange All Share Index (NSE ASI) gained ca +0.31% day-on-day to close at 31,529.92pts, with market’s year-to-date returns at +0.32%.
The NSE Oil & Gas, Consumer Goods and Banking indices all gained ca +257bps, +123bps and +121bps respectively day-on-day, while the NSE Industrial index lost ca 173bps. Zenith Bank Plc led the volume and value charts with 147.03m traded at ₦3.67bn.
The Naira remained stable against the dollar at the interbank market window today, at ₦306.70/$1. In the parallel market, it also remained stable against the Dollar, Pound Sterling and Euro at ₦361/$1, ₦473/₤1 and ₦411/€1 respectively. The Naira depreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦361.54/$1 from ₦361.49/$1.
Crude oil prices recovered some of yesterday’s losses today, supported by reports of further production cuts of ca 400,000 barrels per day by Saudi Arabia to 10.24 million barrels per day vs 10.64 million barrels per day. Brent crude oil price gained ca +0.29% at $61.81pb, while WTI crude rose ca +0.11% at $52.71pb, as at report time. Spot gold rose ca +0.28% day-on-day at $1,317.90 per ounce.
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| AIICO Money Market Fund (AMMF) | |
| Net Yield (As at current date) | 13.22% per annum |
| Added Benefit | Personal accident insurance cover |
| AIICO Capital Guaranteed Income Note (GIN) Rates p.a. | |||||
| Amount (NGN) | 30 Days | 60 Days | 90 Days | 180 Days | 364 Days |
| 10,000,001 – 50,000,000 | 10.00 | 10.50 | 11.00 | 12.00 | 13.00 |
| 50,000,001 – 100,000,000 | 11.00 | 11.25 | 11.50 | 12.50 | 14.00 |
| 100,000,001 – 400,000,000 | 12.00 | 12.25 | 12.50 | 13.00 | 14.50 |
| Trading Treasury Bills Rates p.a. | |||
| Maturity Dates | Tenor (Days) | Discount Rate | Effective Yield |
| 28-Feb-19 | 20 | 9.80% | 9.85% |
| 21-Mar-19 | 41 | 10.60% | 10.72% |
| 01-Aug-19 | 174 | 11.70% | 12.39% |
| 07-Nov-19 | 272 | 14.35% | 16.07% |
| Select Macro-economic Indices | |
| Inflation % (December 2018) | 11.44 (-25.57% ytd) |
| PMI (January 2019) | 61.10 |
| MPR (%) | 14 (-5%/+2% around mid-point) |
| CRR (%) | 22.5 |
| Brent Crude Price US$ pbbl | 61.81 (+0.29% 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) | 31,529.92 (+0.31% d/d; +0.32% ytd) |
| Market Capitalisation (₦’Trillion) | 11.76 |
Financial Markets Update – 08 February 2019
Important Disclaimers
This document has been issued and approved by AIICO Capital and is based on information from various sources that we believe are reliable. However, no representation is made that it is accurate or complete. While reasonable care has been taken in preparing this document, no responsibility or liability is accepted for errors or fact or for any opinion expressed herein. This document is for information purposes only. It does not constitute any offer or solicitation to any person to enter into any trading transaction.
Investments discussed in this report may not be suitable for all investors. This report is provided solely for the information of AIICO Capital clients who are then expected to make their own investment decisions. AIICO Capital conducts designated investment business with market counter parties and customers and this document is directed only to such persons. AIICO Capital accepts no liability whatsoever for any direct or consequential loss arising from any use of this report or its contents. This report is for private circulation only and may not be reproduced, distributed or published by any recipient for any purpose without prior express consent of AIICO Capital. Users of this report should bear in mind that investments can fluctuate in price and value. Past performance is not necessarily a guide to future performance.
AIICO Capital is regulated by the Securities and Exchange Commission, and is licensed to provide fund and portfolio management services in Nigeria.
