All of us at AIICO Capital wish you all the Happiness in the New Year.
Crude oil output from the Organisation of Petroleum Exporting Countries (OPEC) declined sharply by ca 751,000 barrels per day in December 2018 to 31.6 million barrels per day (mbpd) vs 32.3 mbpd in November 2018, data from its Monthly Oil Market Report (MOMR) released today indicated. This was majorly attributed to reduced output by Saudi Arabia, OPEC’s largest oil producer, which lowered production by ca 468,000 barrels per day in a build up to the formal implementation of OPEC’s production-cut deal in January 2019. However Nigeria’s output rose to 1.75 mbpd from 1.73 mbpd.
With high expectation for a lower rise in global crude oil demand by an average of 1.29 million barrels per day (mbpd) in 2019 vs 1.5 mbpd averaged in 2018, we expect highly volatile crude oil prices on uncertainties of U.S./China trade negotiations, rising U.S. Shale output at ca 11.9 mbpd, its highest in history and a slowdown in Chinese economic growth. We expect this to keep Brent crude oil price in an average of ca $55 – $65 per barrel in 2019.
Banking system liquidity was expected to open negative today, with expected inflow from maturing Open Market Operations (OMO) Treasury Bills of ca ₦5600bn. In line with its current tight monetary stance, the Central Bank of Nigeria (CBN) conducted an OMO auction today.
The treasury bills secondary market traded bullish today, with activities focused at the short-to-mid end of the curve. Average rate gained ca +1ps day-on-day, with the 07 March 2019 maturity trading the most to close at 13.52%. Please find below a summary of the results of today’s Open Market Operations (OMO) auction:
|Amount Offered:||₦ 50.00 billion||₦ 100.00 billion||₦ 400.00 billion|
|Subscription:||₦ 57.25 billion||₦ 64.27 billion||₦ 405.39 billion|
|Amount Allotted:||₦ 57.25 billion||₦ 64.27 billion||₦ 405.39 billion|
|Range of bids:||11.9000% – 11.9000%||13.5000% – 15.0000%||%15.0000% – 15.0000%|
Open Buy Back (OBB) and Overnight (O/N) rates dropped to 13.00% and 13.50% from 18.47% and 19.75% 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 7.50% for 30 – 60 days tenor on ₦10mln – ₦100mln.
The bonds secondary market traded relatively quiet today, with light demand seen, particularly on the March 2027 maturity which traded the most to close at 14.96%. Average yields dropped ca -10bps day-on-day.
The Nigerian equities market closed on a positive note for a 6th consecutive trading day as the Nigerian Stock Exchange All Share Index (NSE ASI) gained ca +0.40% day-on-day to close at 30,583.21pts, with market’s year-to-date returns at -2.70%. This was majorly on the back of gains in Dangote Cement Plc (+1.06%) and Nigerian Breweries Plc (0.96%).
The NSE Industrial, Oil & Gas and Consumer Goods indices gained ca +204bps, +51bps and +28bps respectively, while the NSE Banking index lost ca -26bps. Diamond Bank Plc led the volume chart with 59.55m units while Guaranty Trust Bank Plc led the value chart with trades worth ₦1.48bn.
The Naira depreciated against the dollar at the interbank market window today, at ₦306.85/$1 from ₦306.36/$1. In the parallel market, it remained stable against the Dollar and Euro at ₦362/$1 and ₦411/€1 respectively, while it depreciated against the Pound Sterling at ₦464/₤1 from ₦462/₤1. The Naira appreciated at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦362.35/$1 from ₦363.33/$1
Crude oil prices dropped today, on increasing fears of global oversupply as data from the Energy Information Administration (EIA) indicated record high weekly production from the U.S. at 11.9 million barrels per day. Brent crude oil price declined ca -0.28% at $61.15pb, while WTI crude dropped ca -0.69% at $51.95pb, as at report time. Spot gold was down ca -0.11% day-on-day at $1,292.40 per ounce.
|AIICO Money Market Fund (AMMF)|
|Net Yield (As at current date)||13.00% per annum|
|Added Benefit||Personal accident insurance cover|
|AIICO Capital Guaranteed Income Note (GIN) Rates p.a.|
|Amount (NGN)||30 Days||60 Days||90 Days||180 Days||364 Days|
|10,000,001 – 50,000,000||10.00||10.50||11.00||12.00||13.00|
|50,000,001 – 100,000,000||11.00||11.25||11.50||12.50||14.00|
|100,000,001 – 400,000,000||12.00||12.25||12.50||13.00||14.50|
|Trading Treasury Bills Rates p.a.|
|Maturity Dates||Tenor (Days)||Discount Rate||Effective Yield|
|Select Macro-economic Indices|
|Inflation % (November 2018)||11.44 (-25.57% ytd)|
|PMI (December 2018)||61.10|
|MPR (%)||14 (-5%/+2% around mid-point)|
|Brent Crude Price US$ pbbl||61.15 (-0.28% d/d)|
|External Reserve (US$’bi l l ion)||43.05 (-0.16% ytd)|
|GDP % (Q3 2018)||+1.81% (Q2 2018: +1.50% y/y)|
|NSE Al l Share Index (ASI)||30,583.21 (+0.40% d/d; -2.70% ytd)|
|Market Capital is ati on (₦’Tri l l i on)||11.40|