Financial Markets Today

Global equities markets tuned sharply volatile today, declining day-on-day on increased investors’ fears of a return of U.S./China trade tensions. This comes as a CNBC report indicated the unlikely possibility of a deal been reached before the 31 March deadline, in current on-going trade negotiations between the world’s 2 largest economies. All major benchmark indices declined today with the U.S. Dow Jones Industrial Average (DJIA), S & P 500, NASDAQ, German DAX, London’s FTSE and the Japanese NIKKEI indices lost ca -0.87%, -0.94%, -1.18%, -2.67%, -1.11% and -1.04% respectively.

We expect further rise in investors’ uncertainties of global financial markets to drive demand for safe-haven assets, particularly of developed economies in Q1 2019, on the back of growing expectation of a slowdown in global economic growth, fears of economic slowdown in both the world’s 2 largest economies – U.S. and China, possible return and escalation of trade tensions and lower crude oil demand vs 2018.

MONEY MARKETS

CAPITAL MARKETS

FOREIGN EXCHANGE

COMMODITIES

Liquidity in the banking system was expected to open positive today. In line with its tight monetary stance, the Central Bank of Nigeria (CBN) conducted an Open Market Operation (OMO) auction today.

Treasury Bills
The treasury bills secondary market traded bearish today, with sell-offs seen particularly on short-to-mid dated maturities. The 28 February 2019 maturity traded the most to close at 10.18% from 10.05%, with average rate gained ca +17ps day-on-day. Please find below results of the Open Market Operations (OMO) auction held today:

Tenor	119-Days	182-Days	364-Days
Maturity Date:	06-Jun-19	08-Aug-19	06-Jan-20
Amount Offered:	₦ 30.00billion	₦ 70.00billion	₦ 150.00 billion
Subscription:	₦ 39.90billion	₦ 10.59billion	₦ 270.48 billion
Amount Allotted:	₦ 39.90billion	₦ 10.59billion	₦ 270.48 billion
Range of bids:	11.9000% – 11.9000%	13.5000% – 15.0000%	15.0000% – 15.0000%
Stop Rates	11.9000%	13.5000%	15.0000%

Bank Placements
Open Buy Back (OBB) and Overnight (O/N) rates dropped to 17.33% and 18.42% from 20.67% and 21.83%. 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 relatively less active trading day in the bonds secondary market today, with demand still at the mid-to-long end of the curve. The March 2036 maturity also traded the most to close at 14.81% from 15.09% with average yields dropping ca -1bps day-on-day.

Equities
The Nigerian equities market rallied for a 5th consecutive trading day, with the Nigerian Stock Exchange All Share Index (NSE ASI) gaining ca +1.98% day-on-day to close at 31,433.49pts, with market’s year-to-date returns at +0.01%. This was due to price appreciation in Dangote Cement Plc (+1.06%), Guaranty Trust Bank Plc (+9.51%), Nestle Nigeria Plc (+0.68%) and Zenith Bank Plc (+7.24%).

The NSE Oil & Gas, Consumer Goods, Banking and Industrial indices all gained ca +84bps, +64bps, +578bps and +147bps respectively day-on-day. United Bank for Africa Plc led the volume chart with 136.50m while Zenith Bank Plc led the value chart with trades worth ₦1.49bn.

The Naira remained stable against the dollar at the interbank market window today, at ₦306.70/$1. In the parallel market, it remained stable against the Dollar, Pound Sterling and Euro at ₦361/$1, ₦472/₤1 and ₦411/€1. The Naira appreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦361.49/$1 from ₦361.75/$1.

Crude oil prices dropped sharply today, on increased fears of continuance of U.S./China trade tensions in 2019. Brent crude oil price lost ca -1.56% at $61.71pb, while WTI crude was down ca -2.59% at $52.61pb, as at report time. Spot gold dropped ca -0.12% day-on-day at $1,314.20 per ounce.

Top 5 Equitiy Advancers
Name (Symbol)	Closing Price	Gain(N)	% Change
FO	29.7	2.70	+10.00%
UNITYBNK	0.9	0.08	+9.76%
GUARANTY	38.00	3.30	+9.51%
NAHCO	3.49	0.27	+8.39%
ZENITHBANK	24.45	1.65	+7.24%

Top 5 Equity Decliners
Name (Symbol)	Closing Price	Loss(N)	% Change
MCNICHOLS	0.38	-0.04	-9.52%
TRANSEXPR	0.63	-0.06	-8.70%
ROYALEX	0.26	-0.02	-7.14%
LEARNAFRCA	1.40	-0.10	-6.67%
NEM	2.30	-0.15	-6.12%

Benchmark T-Bills Discount Rates
	07-Feb-19	06-Feb-19	Change in Rates
84Days	11.08%	11.23%	-0.15%
175Days	13.23%	13.56%	-0.33%
308Days	14.95%	14.95%	0.00%
Source: FMDQ DQL for 07 February 2019 *T-Bills Discount Rates are slightly different from current market rates

Benchmark FGN Bond Yields
	07-Feb-19	06-Jan-19	Change in Yield
3 yrs: 16.00% 29-Jun 2019	13.51%	13.66%	-0.15%
5 yrs: 15.54% 13-Feb 2020	15.27%	15.19%	0.08%
10 yrs: 16.29% 17 Mar 2027	14.82%	14.91%	-0.09%
20 yrs: 16.25% 18-Apr 2037	14.80%	15.01%	-0.21%
Source: FMDQ DQL for 06 February 2019

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	21	9.75%	9.81%
21-Mar-19	42	9.55%	9.66%
01-Aug-19	175	12.20%	12.96%
07-Nov-19	273	14.35%	16.08%

Select Macro-economic Indices
Inflation % (December 2018)	11.44 (-25.57% ytd)
PMI (December 2018)	61.10
MPR (%)	14 (-5%/+2% around mid-point)
CRR (%)	22.5
Brent Crude Price US$ pbbl	61.71 (+1.56% 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)	31,433.49 (+1.98% d/d; +0.01% ytd)
Market Capitalisation (₦’Trillion)	11.72